OCK Group said the investment would be funded through internally generated funds and bank borrowings.
PETALING JAYA: OCK Group Bhd
has entered into a conditional investment agreement to invest RM350mil in Solarpack Asia Sdn Bhd (SPK Asia), and indirectly in Solarpack Suria Sungai Petani Sdn Bhd (3SP), of which SPK Asia holds a 49% stake in.
3SP is the developer, owner and operator of a 116 megawatt (MW) operational solar photovoltaic (PV) plant located in Sungai Petani, which was awarded under the third large-scale solar programme (LSS3).
OCK Group said the proposed investment is in line with its business expansion strategy, as it intends to focus on growing its solar energy related business by taking proactive approaches to capitalise on the growing demand for renewable energy solutions.
The deal will see OCK Group subscribing to 1,000 redeemable preference shares in SPK Asia to be issued by the latter, which would then confer on OCK Group the right to be paid, out of profits of SPK Asia, a dividend amount to be determined and approved by the board of directors of SPK Asia.
The investment consideration is determined based on a value of RM350mil that is subject to working capital, debt, cash and cash equivalents adjustments to be determined based on steps in the agreement.
OCK Group said the agreement is justifiable after considering the valuation of an independent business valuer who estimated the enterprise value of 3SP to be between RM344.7mil to RM350.7mil.
In a filing with Bursa Malaysia, OCK Group said the investment would be funded through internally generated funds and bank borrowings.
3SP is principally involved in designing, constructing, ownership, operation and maintenance of a 90.88 MW solar PV power plant in Sungai Petani.
The solar PV power plant commenced commercial operations on March 8 2022, with the company having secured a 21-year power purchase agreement with Tenaga Nasional Bhd, awarded under Malaysia’s LSS3 Scheme in 2022, of which is due for expiry in March 2043.
Commenting on the prospects of the investment, OCK Group said the proposed deal will increase its total solar generation assets.
