Jakel, via its investment arm Jakel Capital Sdn Bhd, acquired a 23.08% stake in Cypark at 38 sen per placement share.
PETALING JAYA: Cypark Resources Bhd
, which was previously affected by cash flow and debt concerns, has received a helping hand from textile wholesaler Jakel Group which invested RM67.13mil into the renewable energy (RE) player.
Via its investment arm Jakel Capital Sdn Bhd, Jakel acquired a 23.08% stake in Cypark at 38 sen per placement share, making it the single largest shareholder. In comparison, Cypark shares closed at 54 sen yesterday, giving it a market capitalisation of RM319.11mil.
Cypark’s private placement exercise, which was completed yesterday, encompasses a total of 176.65 million new shares. The shares were fully taken up by Jakel Capital.
The Jakel family further reinforced its control on Cypark, with the four brothers of the family acquiring additional shares in Cypark from the open market.
Cumulatively, the four brothers bought 4.26% in direct shareholding, on top of the 23.08% stake owned via Jakel Capital.
Datuk Seri Mohamed Faroz Mohamed Jakel, who is the managing director of Jakel Group, acquired a 3.18% stake under his direct interest.
Jakel Group chief operating officer Datuk Mohamed Nizam Mohamed Jakel acquired a direct stake of 0.71% in Cypark from the open market.
Jakel Group director Mohamed Izani Mohamed Jakel acquired 0.28% in direct shareholding, while Luqman Mohamed Jakel acquired 0.09%.
This is not the first time the Jakel brothers have emerged on public listed companies’ shareholdings.
Previously, their names were on the shareholders list of several penny stock companies such as Sedania Innovator Bhd, G3 Global Bhd, TH Heavy Engineering Bhd, Parlo Bhd, Dataprep Holdings Bhd, One Glove Group Bhd and Scomi Group Bhd.
In a statement yesterday, Jakel Group said the strategic investment in Cypark would help to “rebalance its investment exposure” by incorporating environmental, social and governance (ESG) investing into its portfolio.
Currently, apart from textile trading and wholesale, Jakel Group is also involved in property development.
Jakel Capital chief executive officer Muhammad Ashraf said the investment in Cypark provides Jakel Group with a timely opportunity to play an active role in shaping the ESG issues in the country.
He added that Cypark is currently traded at an attractive valuation of approximately 8.5 times price-to-earnings ratio (PER), compared to its peers that are currently trading at more than 20 times PER
The company currently owns or operates close to 150MW of renewable energy assets, and with multiple construction of new power plants due for completion and approval, this capacity will increase to more than 400MW by mid-2023.
“Cypark remains fundamentally strong and the recent private placement exercise provides itself with an opportunity to improve its gearing and optimise its capital structure.
“We believe its current market capitalisation provides us with comfortable margin of safety to cushion any potential downside risks identified, yet mindful of cash flows requirements as an infrastructure or utility company.
“Furthermore, the technical expertise of Cypark’s construction and engineering arm and its past involvement in landmark projects are worth leveraging for upcoming infrastructure jobs in the country.
“Moving forward, as Cypark is now an associate company of Jakel Capital, we are committed to investing in the company for the long haul and we remain bullish on the growth of its clean energy industry,” he added.
Looking foward, Muhammad Ashraf said Jakel Group has allocated RM150mil of internally generated funds to Jakel Capital in 2023 to invest in target sectors namely healthcare, food security, technology and smart manufacturing as well as green and sustainable industries.
This is on top of the approximately RM100mil already invested throughout 2022 in both private and public equity markets.
The acquisition of shares by Jakel Capital into Cypark through the private placement exercise would provide the latter with infusion of capital; RM50mil of which earmarked for the 98MW solar photovoltaic projects in Kelantan slated for completion in May 2023.
The remaining sum for the working capital requirements of the 20MW integrated waste-to-energy plant in Negri Sembilan, addressing earlier concerns on project cash flows and delays.
