PETALING JAYA: Kejuruteraan Asastera Bhd (KAB) has entered into two share purchase agreements with Invest Energy Sdn Bhd for the acquisition of Konpro Industries Sdn Bhd and Meru One Sdn Bhd for a collective cash consideration of RM12.03 million via its wholly owned subsidiary KAB Energy Power Sdn Bhd.
According to the group’s Bursa disclosure, it has previously entered into two head of agreements, which was announced on March 25, 2020, with Invest Energy to acquire the entire stake of Konpro for RM5.1 million and Meru One for RM2.16 million which included assuming a RM4.24 million liabilities.
Konpro which owns a 2.2MW waste heat recovery facility located in Bandar Sri Sendayan, Negri Sembilan, and Meru One which has a 2MW cogeneration facility in Klang, Selangor, has each entered into an energy purchase agreement with a concession period of 10 years, four month and eight years respectively.
KAB revealed that the acquisition of Meru One is subject to the concession period being extended to 16 years.
As for the difference in the purchase price, it stated it was due to the adjustment arising from a diligence audit.
On the whole, the group explained that the price was arrived at a willing-buyer, willing-seller basis which takes into account the discounted cash flow of the companies based on the contractual life of the projects along with due diligence audit.
Upon completion Konpro and Meru One will be its indirect wholly owned subsidiary. The 2.2MW waste heat recovery facility and the 2MW cogeneration facility are expected to contribute a total revenue of RM104 million from the generation of an estimated 284,680 megawatt-hour of electricity over the course of the concessional periods.
KAB’s managing director, Datuk Lai Keng Onn, remarked that the acquisition is part of its intention to grow and expand its income stream through the green solution business.
“Concurrently, these transactions are sources of long-term recurring income for the company which will eventually create more value for our stakeholders. We are constantly on the look-out to secure strategic investments for sustainable growth,” he said in a press release.
Lai highlighted that the was heat recovery system and cogeneration will reduce carbon footprint and limit the emission of greenhouse gas emissions.
“On the whole, these acquisitions bode well for us and evidently, this is our way to contribute to the protection of the environment for the betterment of the future generation.”