The identified business and identified assets of Solar Bina Engineering Sdn Bhd valued at RM41.5mil, will be injected into the target company by Eric Lee Seng Chi, the sole shareholder and managing director of Solar Bina.
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.
"“This venture marks a strategic move by Reservoir Link as we continue to build a sustainable business while simultaneously playing our role to reduce our carbon footprint, in responding to global initiatives.
"Our pivot into the renewable energy industry has been in our strategic pipeline and we are optimistic that this venture will be a new stream of long-term recurring income for Reservoir Link. We are confident of Solar Bina’s capabilities and will leverage on each other’s expertise to bid for more solar renewable projects going forward," said Reservoir Link executive director Thien Chiet Chai in a statement.
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.