MAIN Market-listed Federal International Holdings Bhd (previously Federal Furniture Holdings (M) Bhd) is accelerating the pace of its entry into the renewable energy (RE) scene by channelling more resources towards the new market segment.
Yesterday (Oct 5), the company’s wholly owned subsidiary Federal Furniture (1982) Sdn Bhd inked a sale and purchase agreement with Filtermation (Mfg) Sdn Bhd for the disposal of a parcel of leasehold industrial land in Banting (Selangor) for RM24.5 mil cash.
The industrial land measuring 20,044 sq metres, which was acquired on Jan 28, 1989, consists of a single storey furniture industrial factory with an annexed double-storey office building and other ancillary buildings. The original cost of investment in the property was RM4.5 mil.
The Federal International board may consider payment of special dividend to shareholders upon completion of the proposed disposal.
“It has been an exciting journey for us over the last three decades as seen by our track record and sustained financial performance in the (furniture) manufacturing, interior fit-out and construction business,” commented Federal International’s managing director Datuk Choy Wai Hin.
“And the time is now right for us to channel our resources into our venture in the RE segment given the sector’s potential growth.”
According to Choy, the asset disposal exercise will free up cash flow for Federal International to push forward its plan to venture into the RE segment which could drive new sustainable recurring income for the group while also investing in the Fourth Industrial Revolution (IR4.0) for its manufacturing business.
Recall that Federal International had earlier collaborated with a group of “green-tech entrepreneur” and multinational company via its 50%-owned Warrants RE Assets Sdn Bhd by inking a memorandum of understanding with SPIC Energy Malaysia Bhd to acquire in part or in 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 which is one of China’s top five power generators.
Being a Global Fortune 500 company, SPIC has a sound presence in the international energy market with operations in many countries. With more than 126 gigawatt (GW) installed generation capacity, SPIC is also playing a significant role in China’s the internal RE sector.
“We will leverage our collaboration with SPIC Malaysia to accelerate our plans to venture into the RE business. The world is gradually shifting towards RE and we want to be part of this push for sustainability,” enthused Choy.
In a related development, Choy also noted that the proposed disposal is part of the group’s initiative to streamline its manufacturing operations into a single location in Puchong given such move would result in significant cost savings.
“The disposal is also part of our plans to realign our manufacturing business and focus on capacity building by investing in IR 4.0 to maintain the growth in efficiency and profitability of our already leading edge furniture and fixtures manufacturing division,” added Choy.
At the close of yesterday’s trading, Federal international was unchanged at 60.5 sen with 659,400 shares traded, thus valuing the company at RM82 mil. – Oct 6, 2021
