Reservoir Link Energy signs term sheet for stake purchase in renewable energy SPV
KUALA LUMPUR: Reservoir Link Energy Bhd has entered into a term sheet for the proposed acquisition of a 51% stake in a new special purpose vehicle (SPV) to undertake solar renewable energy projects in Malaysia.
The SPV is to be incorporated by Lee Seng Chi, the owner and managing director of Solar Bina Sdn Bhd, whereupon identified assets and business will be transferred from Solar Bina into the SPV.
According to the filing with Bursa Malaysia, Solar Bina is currently involved in the provision of implementation of solar photovoltaic projects for residential, commercial
and industrial properties and large scale solar PV plants.
This includes the supply and installation of solar mounting system and other engineering works involving civil, structural, mechanical and electrical engineering works.
THe purchase consideration of RM21.17mil for the 51% stake in the target company is to be settled via RM8.46mil cash and and the issuance of 18.15 million new ordinary shares in Reservoir Link Energy for 70 sen apiece.
The agreement comes with a profit guarantee from the vendor that the company shall achieve an aggregate profit after tax of RM13.84mil for an agreed period of 24 months from the completion date of the proposed acquisition.