VS Industry to diversify into solar energy business

PETALING JAYA: VS Industry Bhd's 54.13%-owned Hong Kong-listed subsidiary VS International Group Ltd has proposed to acquire a 20% stake in Cadre Project Development Company Ltd for RMB44 million (RM25.41 million), paving the way for VS to venture into the solar energy segment.
In a filing with the stock exchange, VS said Cadre is involved in the construction and development of a ground-based solar power plant in Liangcheng County, Inner Mongolia, with an expected aggregate installed power generating capacity of about 20MW. It is expected to achieve on-grid connection in the second half of 2015.
Under the acquisition agreement, VS is given an option to acquire the remaining 80% stake in Cadre, subject to the fulfillment of the conditions precedent to the option acquisition.
VS explained the acquisition will enable the group to diversify its income and asset base given it has been operating under an extremely challenging and competitive environment.
"With the exposure to the solar energy industry, the group can also explore the business potential in the value chain of the solar energy industry, such as manufacturing and assembling parts and modules required for solar power plants, using the group's existing strengths and expertise," it said.
VS is principally engaged in the manufacturing and sales of plastic moulded products and parts, assembling of electronic products, and mould design and fabrication.
However, its shares reacted negatively towards the acquisition plan, registering a drop of 18 sen or 4.93% to close at RM3.47 last Friday. A total of 2.63 million shares were traded.