KUALA LUMPUR (July 1): Seal Incorporated Bhd (KL:SEAL) is seeking shareholder approval to increase financial support for its 24.55%-owned associate, MSR Green Energy Sdn Bhd (MSRGE), by providing up to RM58.72 million in additional corporate guarantees, raising its total commitment to RM119.3 million.
The additional support will help MSRGE secure financing for its expanding renewable energy projects, including the 200MWac Kandis/Bachok Large Scale Solar 5+ (LSS5+) project in Kelantan, and a keyman insurance policy covering the life of any director of MSRGE.
The proposed guarantees would raise Seal's total corporate guarantees for MSRGE to RM119.32 million from the RM60.60 million approved by shareholders in February 2025.
The guarantees will back MSRGE's banking facilities and foreign exchange contract facilities.
In a Bursa Malaysia filing on Wednesday, Seal said the additional financial assistance was necessitated by its increased effective stake in MSRGE, which rose from an original 20% to 24.55% after acquiring an additional 10% stake in March 2025.
The stake had earlier increased to 30%, before being diluted following the conversion of redeemable convertible preference shares by KVC Corporation Sdn Bhd on June 30.
KVC Corporation is the private investment vehicle of Aaron Chen Khai Voon, Seal's largest shareholder with a 28.64% stake.
Chen co-founded Genetec Technology Bhd (KL:GENETEC) and ceased to be a substantial shareholder in the automation solutions provider in 2025 after disposing of his stake. Genetec's shares surged more than 10-fold from around 30 sen to a peak of RM3.80 during its 2021 rally.
The higher guarantee also reflects additional banking facilities secured by MSRGE, including a RM180 million increase in bank guarantee facilities to support the Kandis/Bachok LSS5+ project in Kelantan.
Including existing facilities, MSRGE's total banking facilities now stand at up to RM476 million.
Seal said the proposed guarantees comprise RM13.79 million for existing banking and foreign exchange facilities, RM44.19 million for the new bank guarantee facilities and RM740,000 for a new term loan facility.
MSRGE is principally involved in solar photovoltaic installation systems, renewable energy projects, and battery energy storage system (BESS) engineering, procurement and construction works.
Its ongoing projects include the RM600.32 million Kandis/Bachok LSS5+ project in Kelantan, the RM644.63 million Sabah BESS project and the RM306.36 million Santong BESS project in Terengganu.
Seal said the financial assistance would enable MSRGE to secure adequate financing without requiring additional equity injections from shareholders, while preserving capital and supporting timely project execution.
The guarantees are proportionate to Seal's 24.55% equity interest in MSRGE, it added.
The company noted that the guarantees would be recognised as contingent liabilities and could be called upon if MSRGE defaults on its banking facilities.
However, it said the proposal is not expected to have any material impact on the group's net assets, gearing or earnings for the financial year ending June 30, 2026, unless the guarantees are invoked.
The proposal is subject to shareholders' approval at an extraordinary general meeting to be convened.
As at end-March, Seal had RM23.19 million in cash and fixed deposits, while total borrowings stood at RM84.64 million.
For the first nine months of FY2026, the group posted a net profit of RM4.2 million, compared with a net loss of RM95,000 a year earlier, while revenue rose 28% to RM32.64 million from RM25.41 million.
Shares in Seal closed unchanged at 67.5 sen on Wednesday, giving the company a market capitalisation of RM303.6 million. The stock has fallen 3.6% over the past 12 months.
Uploaded by Magessan Varatharaja