FEDERAL International Holdings Bhd (formerly Federal Furniture Holdings (M) Bhd) will partner China’s top five electricity generation company State Power Investment Corporation (SPIC) in its maiden foray into the multi-billion ringgit renewable energy (RE) sector.
On Sept 21, 2021, the Group had participated in the incorporation of Warrants RE Assets Sdn Bhd with a group of ‘green-tech entrepreneurs’ and a multinational company with Federal International holding a 50% stake in the entity.
The purpose and goal of Warrants RE Assets is to invest in greenfield and brownfield RE projects in Malaysia.
Yesterday (Sept 24), the entity signed a memorandum of understanding (MOU) with SPIC Energy Malaysia Bhd for both parties to forge a business collaboration to acquire part or whole operating feed-in tariff (FiT), net metering (NEM) and large scale solar (LSS) solar farm.
SPIC Malaysia is a wholly-owned subsidiary of SPIC, a Global Fortune 500 company with sound presence in the international energy market in many countries. With more than 126 gigawatt (GW) installed generation capacity, SPIC also plays a significant role in China’s internal RE sector.
The collaboration with SPIC Malaysia marks our first venture into the RE sector and we’re proud to have SPIC as our technical partner,” commented Federal International’s executive director Datuk Choy Wai Ceong.
“The involvement of SPIC is a vote of confidence towards our management and will help us to escalate the expansion of our footprint in the renewable energy segment.”
According to Choy, the collaboration will focus on the acquisition of solar farm that has fully operated or those that are under construction.
“The solar farm would then undergo a process of repair and upgrade under a team led by SPIC. This will help the escalation of the turnaround of the solar farm that has been acquired, thus helping to generate immediate positive cash flow,” he added.
In this regard, Warrants RE Assets is responsible for the funding aspect with SPIC Malaysia providing technical support in relation to the solar power plant and other RE projects in Malaysia.
The success of these projects will put Warrants RE Assets in a good position to be a RE project owner, hence able to generate positive cash flow and a sustainable recurring income stream for Federal International.
“The pivot into the RE sector marks a step-up for the group that has shown a strong financial track record in the furniture and construction business,” added Choy.
At the close of yesterday’s trading, Federal International was up 4.5 sen or 7.2% to 67 sen with 6.69 million shares traded, thus valuing the company at RM83 mil. – Sept 25, 2021
