G CAPITAL Bhd (GCAP) has further firmed up its renewable energy (RE) footprint with the inking today of a 25-year solar power purchase agreement (PPA) between its 70%-owned subsidiary Solarcity Malaysia Sdn Bhd and Chin Well Fasteners Co Sdn Bhd and Chin Herr Industries (M) Sdn Bhd.
A filing with Bursa Malaysia today shows that Solarcity will design, construct, install, own, operate and maintain a solar photovoltaic (PV) energy generating system with a capacity of 2,380.32 KWp (kilowatt peak) and 3,000.24 KWp respectively for Chin Well Fasteners and Chin Herr (total capacity stands at 5,380.56 KWp).
Both Chin Well Fasteners and Chin Herr are wholly-owned subsidiaries of Chin Well Holdings Bhd, a Main Market-listed company specialising in the production and trading of fastening and wire products.
“We are pleased to witness Chin Well group of companies’ transitioning into renewable energy (RE),” commented GCAP’s executive director Datuk Yap Yee Ping. “The installation of the solar-power generating facilities shall reduce Chin Well’s energy expenditure and their carbon footprint which is in line with Malaysia’s RE agenda.”
According to the stock exchange filing, both plants are expected to achieve the commercial operation date by 4Q 2022 and thereafter are expected to contribute positively to the future earnings of the GCAP group.
“With this winning of 5.38MW (megawatt) PPA, Solarcity has bagged a total of 30.75MW PPA since GCAP assumed 70% ownership in the company in February 2021.” revealed Yap.
“Also effective this date, the GCAP has powered 8.3MWp solar PV system which would start contributing to the group’s sustainable and recurring cash flow from this year onwards.”
The first solar PV system was powered up in September 2021 for De-Luxe Food Services Sdn Bhd (1.1MWp) followed by Muda Pasifik Sdn Bhd (1.2MWp in January 2022), Muda Paper Mills Sdn Bhd (3.0MWp in February 2022) and Muda Paper Converting Sdn Bhd (3.0MWp in March 2022).
“The signing of these two latest PPAs augur well with GCAP’s proposed rights issue of redeemable convertible unsecured loan stocks (RCULS),” Yap pointed out.
“Upon full subscription of the RCULS, up to RM4.8 mil of the proceeds will be used to part-finance the solar PV systems for these two PPAs. With bank project-financing facility funding the remaining of the project costs, we are expecting both solar PV systems to reach commercial operation date by October 2022 and contribute positively to the group’s cash inflows and earnings thereafter.”
According to Yap, GCAP’s shareholders have approved its rights issue exercise during an extraordinary general meeting (EGM) held on April 27.
“We’re optimistic of an eventual full subscriptions from the shareholders. We are also confident that utilisation of proceeds from the proposed rights issue to completing the solar
PV projects and mini-hydropower projects will be able to maximise shareholders value,” she added.
At 4.44pm, GCAP was down 1.5 sen or 2.5% to 58.5 sen with 166,400 shares traded, thus valuing the company at RM188 mil. – May 9, 2022
