KUALA LUMPUR (Oct 2): Seal Incorporated Bhd (KL:SEAL) non-interested shareholders are advised to vote in favour of providing associate company MSR Green Energy Sdn Bhd (MSRGE) a corporate guarantee of RM58.72 million to help it complete several solar projects.

In a bourse filing on Friday, the group said its independent adviser, UOB Kay Hian (M) Sdn Bhd, deemed the proposal "fair and reasonable” and not detrimental to minority shareholders, and they should vote for it at the extraordinary general meeting on Oct 21 in Petaling Jaya.

UOB Kay Hian highlighted that the corporate guarantee allows MSRGE to obtain and utilise vital banking facilities without direct cash or equity injections from Seal, thereby preserving the group's working capital.

The proposed guarantee comprises 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 seeking financing for its expanding renewable energy projects, which include the 200MWac Kandis/Bachok Large Scale Solar 5+ (LSS5+) project in Kelantan awarded by BPP Solar.

To date, MSRGE’s ongoing projects include the RM600.32 million Kandis/Bachok LSS5+ project in Kelantan, the RM644.63 million Sabah battery energy storage system (BESS) project and the RM306.36 million Santong BESS project in Terengganu.

Formerly a property developer, Seal has expanded into renewable energy by acquiring stakes in MSRGE, which specialises in engineering, procurement, construction and commissioning (EPCC) for solar and energy storage systems.

Seal initially held a 20% equity stake in MSRGE, which increased to 30% in March 2025. On June 30, the conversion of redeemable convertible preference shares (RCPS) by KVC Corporation Sdn Bhd diluted Seal’s shareholding to 24.55%.

To safeguard against further dilution, Seal holds 1,059,583 Irredeemable Convertible Preference Shares (ICPS) in MSRGE, which will convert into ordinary shares in stages upon meeting specified project milestones.

UOB Kay Hian also noted MSRGE's strong track record, having exceeded its profit guarantee of RM21 million for FY2024-FY2025 by delivering an adjusted profit after tax of RM38.16 million ahead of schedule.

Seal Incorporated shares closed half a sen higher or 0.80% at 63 sen on Friday, valuing the group at RM283.4 million.