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Seal Incorporated Bhd has proposed acquiring a 20% equity stake in the struggling MSR Green Energy Sdn Bhd, a solar panel installer, for RM8.7 million. Additionally, the group intends to subscribe to approximately 1.06 million irredeemable convertible preference shares in MSR Green Energy for RM6.3 million. In total, Seal plans to invest RM15 million.
According to a filing with Bursa Malaysia, Seal views this investment as an opportunity to diversify its current operations into renewable energy, particularly focusing on engineering, procurement, construction, and commissioning (EPCC) activities for the solar and renewable energy sector. This strategic move aligns with potential opportunities arising from the government’s concerted efforts to decarbonize the power sector.
Seal highlighted that venturing into solar renewable energy will enable the group to establish a more resilient business model and diversify its income streams, especially in the aftermath of the Covid-19 pandemic’s impact on global economies and businesses.
The investment, expected to be finalized by the second quarter of this year, will be financed through internally generated funds and a private placement exercise completed on July 20, 2023. This exercise involves the placement of 62.3 million new ordinary shares in Seal, representing approximately 20% of the total issued shares, valued at RM16.19 million extended to Chen Khai Voon at an issue price of 26 sen per share.
Seal emphasized that the proposed investment is a pathway for the company to progressively transform into an environmental, social, and governance (ESG) entity. This transformation is expected to garner greater recognition and support from investors, particularly larger institutional investors who prioritize ESG criteria.
MSR Green Energy is primarily engaged in the installation and servicing of solar photovoltaic (PV) systems, renewable energy project management, consultancy, construction, electrical works, and other ancillary businesses. For the financial year ending December 31, 2022 (FY22), MSR Green Energy reported a loss after tax of RM14.3 million and a deficit in net assets of RM8.3 million, respectively. |
