KUCHING: Kumpulan Powernet Bhd (KPower) is expected to raise up to RM55.3mil from its private placement to fund the company’s diversification into the construction business and construction-related activities.
The company has fixed the issuance price for the private placement of more than 29.3 million shares at RM1.89 per share after shareholders approved the fund raising exercise at its EGM last week.
KPower is the third listed-entity controlled by Sarawakian tycoon Datuk Mohd Abdul Karim Abdullah to undertake the private placement in the past two months.The other two companies are Serba Dinamik Holdings Bhd and Sarawak Consolidated Industries Bhd (SCIB).
Mohd Abdul Karim is founder and group managing director/CEO of Serba Dinamik and chairman of SCIB. Early last month, Serba Dinamik raised RM456.7mil from local and foreign institutional investors from its private placement which was oversubscribed by about 1.5 times.
SCIB, on the other hand, raised about RM66.88mil from a similar fund raising exercise two weeks ago, with the proceeds mainly to be utilised to finance its on-going construction projects mainly in the Middle-East.
SCIB, its traditional core business of which is in the manufacturing of precast concrete products and industrial building system (IBS) components, expands its business beyond Sarawak shores after Mohd Abdul Karim took control of the company last September.
Via recently approved recurrent related party transaction (RRPT), SCIB group is expected to secure projects worth a hefty RM1.37bil from Serba Dinamik over the next 24 to 36 months.
At the EGM, KPower shareholders also voted for the proposed share split in the subdivision of one existing share into two shares, and the allocation of up to 9.4 million placement shares (18.8 million subdivided shares) to its chairman Abdul Karim, who currently owns about 29 million shares, or a 34.69% stake, in the company.
Abdul Karim, 55, emerged as a substantial shareholder in KPower when he acquired 15.26 million shares or 20.04% in off-market deal on June 20,2019.From there, he aggressively built up his shareholdings in the company. Also approved was the allocation of 5.4 million placement shares (10.8 million subdivided shares) to another substantial shareholder Grand Deal Vision Sdn Bhd.KPower deputy chairman and group managing director Mustakim Mat Nun and non-independent non-executive director Sarah Azreen Abdul Samat have shareholdings in Great Deal, which has a 13.73% stake in KPower.
KPower will also allocate 300,000 placement shares (up to 600,000 subdivided shares) each to two of its key executives Amirul Afif Abdul Aziz and Muhammad Syukri Sulaiman
The remaining 29.3 million placement shares have been set aside the for subscription of third party investors(s).
With the approval of the shareholders, KPower is diversifying the group’s principal activities to include construction business and construction-related activities, including but not limited to, the construction of projects under the energy, utility, infrastructure and logistics sectors.
The company’s traditional core businesses are in property development and investment as well textile manufacturing.
According to KPower, the proceeds from the private placement would be utilised for working capital for construction projects and for general working capital. The ongoing construction projects include a Green Building Index certified building of 12 floors in Kuala Lumpur which KPower was awarded for RM254.32mil.Works has commenced last December for scheduled completion in 36 months.
The group is currently constructing a 8MW hydropower plant in Laos for RM69mil.
KPower has also started works on another hydropower project in Perak which it was awarded for RM354mil recently.The project involves the construction of five mini hydropower plants with total capacity of 32.47MW.
The project is to be completed within 48 months or not later than Dec 24,2023.
On property development, KPower is now constructing two units of six-storey shop offices and four units of five-storey shop offices in Sentul, Kuala Lumpur.
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