RENEWABLE energy player G Capital Bhd (GCAP) expects to ride on the synergy from its acquisition of the remaining stake in Perak Hydro Renewable Energy Corporation Sdn Bhd (PHREC) by fostering a close tie with the latter’s former shareholder Perak MB Inc.
Yesterday (July 19), GCAP inked a term sheet for the proposed acquisition of 120,000 sale shares which represent the balance 40% stake in PHREC that is not currently owned by GCAP via issuance of shares, and redeemable and convertible preference shares (RCPS).
A filing with Bursa Malaysia shows that the purchase consideration will potentially be satisfied via a combination of RM50 mil new ordinary shares in GCAP and the remaining balance via the issuance of RCPS at an issue price of 50 sen per RCPS.
The actual units of RCPS to be issued shall be dependent on the purchase consideration to be determined by taking into consideration the completion of a valuation exercise to be carried out on PHREC.
“We’re excited with the intrinsic value to the deal on top of making PHREC our wholly-owned subsidiary,” commented GCAP’s executive director Tan Sri Dr Ali Hamsa. “We envisage that the negotiations with the vendor and the share sale agreement will be finalised in due course.”
Upon completion of this exercise, Perak MB Inc may emerge as a substantial shareholder in GCAP. With the group’s 100% ownership of the water rights in PHREC’s possession, GCAP is confident of unlocking the intrinsic value of water rights in the near future.
“It is an honour to have Perak MB Inc considering equity participation at GCAP level. GCAP welcomed Perak MB Inc as one of the sophisticated investors,” Ali further pointed out.
“With the excellent success stories of Perak MB Inc serving as holding arm for the Perak state in diversified mineral development, property development and various strategic industries, we have faith that this proposal shall lead to the formation of a long-term strong alliance between GCAP and Perak MB Inc which ought to bear fruitful outcome.”
To recap, PHREC was mandated by the Perak State Government to act as the master developer and overall coordinator for the development of mini-hydropower plants in Perak.
It has the exclusive rights to build, operate and own the mini-hydropower plants at 31 pre-identified sites with an estimated total installed capacity of 286.1 megawatts (MW) for a period of 21 years from the feed-in-tariff commencement date for each site.
Moving forward, Ali noted that GCAP shares common goals and values with the Perak state’s green energy development agenda to form a robust economic chain with high potential to provide employment and business opportunities.
“We believe GCAP will have support from Perak MB Inc in various business undertakings,” he pointed out.
At the close of yesterday’s trading, GCAP was up 3 sen or 4.41% to 71 sen with 976,700 shares traded, thus valuing the company at RM228 mil. – July 20, 2021
