SOLARVEST (SLVEST) has proposed a private placement of up to 84.7 mil new shares, representing 10% of its enlarged share capital based on existing issued share capital of 847.7 mil shares.
“The issue price will be determined later, at a discount of no more than 10% to the 5-day VWAP prior to price fixing,” said APEX Securities.
The placement is expected to be completed in the first half of calendar year 2026 (1HCY26) and may be executed in one or multiple tranches. Based on an indicative issue price of RM3.00/share, the proposed placement is expected to raise up to RM254.1 mil.
Of this, RM124.6 mil (49%) will be earmarked for CAPEX on solar PV projects, comprising RM30.0 mil for the 60MWac LSS5 facility in Kuala Langat, RM49.0 mil for the 470MWac LSS5+ project in Larut & Matang, and RM45.6 mil for the 100MWac Mukah Solar Project.
In addition, RM50.0 mil (20%) will be allocated for the repayment of borrowings, specifically the Group’s IMTN which will mature in September 2026, while RM79.2 mil (31%) will fund working-capital requirements, mainly for solar module procurement and subcontractor payments.
The remaining RM0.3 mil is set aside for placement-related expenses. The rationale of the exercise is to strengthen SLVEST’s capital base and fund renewable energy expansion without incurring additional interest expense of RM2.8 mil.
Upon completion, the private placement is expected to reduce gearing from 0.69x to 0.38x, thereby enhancing liquidity and financial flexibility ahead of the rollout of new LSS5+ and Corporate Green Power Programme (CGPP) projects.
“We are positive on the proposed placement. While the issuance will strengthen SLVEST’s balance sheet through debt reduction, it will also result in an estimated 8.4% dilution to financial year 2027 future (FY27F) earnings per share (EPS) under the fully diluted scenario, after accounting for the conversion of 20.7 mil outstanding warrants and 59.2 mil ESOS options,” said APEX.
This implies a fully diluted fair value of RM3.09/share. The placement also reflects management’s readiness to capitalise on upcoming utility-scale solar projects, which should reinforce SLVEST’s growth trajectory over the medium term.
“We have raised our FY26F solar order book assumption to RM2.5 bil from RM2.4 bil, following the proposed private placement, which is expected to enhance financing capacity and enable the Group to secure larger utility-scale solar projects,” said APEX.
APEX maintains the BUY recommendation with a higher target price of RM3.55 (from RM3.41), alongside a three-star ESG rating. SLVEST remains well-positioned to capitalise on government-led renewable energy initiatives, supported by its in-house solar financing capability and its standing as Malaysia’s largest solar EPCC player. Increase in solar module costs. Heavy reliance on government initiatives. Intense market competition. —Oct 22, 2025
Main image: Solarvest
