Kualalumpur: Here is the text of news released by official news agency Bernama on its website:
Kejuruteraan Asastera Bhd's (KAB) wholly owned subsidiary, KAB Energy Holdings Sdn Bhd (KABEH) is acquiring 100 per cent shares in Sarawak Cable Bhd's (SCB) subsidiary, PT Inpola Mitra Elektrindo (PT IME) for RM10,000.
Following the proposed acquisition, KABEH has entered into a term sheet agreement with SCB, KAB said in a filing with Bursa Malaysia today.
"KABEH’s acquisition shall be free from all encumbrances. PT IME will also be released from all liabilities and encumbrances upon the full settlement of the purchase consideration and outstanding debt of up to RM61.5 million
"As part of the agreement, KABEH is required to undertake a due diligence exercise, which is expected to be completed within three months from the date of the term sheet execution," it said.
PT IME which designs, constructs, develops and operates a mini hydro power plant, named Kombih III, situated at Sungai Kombih, North Sumatera, Indonesia, has an existing power purchase agreement to supply electricity to Indonesia state-owned utility company, PT Perusahaan Listrik Negara, for a concession period of 20 years.
KAB managing director Datuk Lai Keng Onn said this was the company's first foray into Indonesia as well as its maiden venture into the hydro power sector.
"We are excited to embark on this business journey and see this proposed acquisition of PT IME as being in line with the group’s business direction to expand the income stream and have a strong foothold in our green energy solutions business, particularly in the renewable energy sector.
"As hydropower assets are known to fetch higher margins, we are confident that this proposed acquisition will yield very profitable returns, which in turn will provide a stable and sustainable long-term recurring income for KAB for the next 20 years," he said.
He said the annual energy generated by Kombih III will be approximately 49,056,000 kWh, which will offset 26,784 tonnes of carbon dioxide emission.
"Upon completion of the acquisition, the asset is projected to contribute at least RM270 million revenue to the group over the concession period.
"We are optimistic of the progress that we are making to further augment this segment of our business," he added.