KUALA LUMPUR: KPower Bhd is planning to expand into hydro assets ownership via a deal with Pristine Falcon Sdn Bhd to purchase the entire equity interest in One River Power Sdn Bhd for RM130mil in cash and shares.
In a statement, the group said its wholly owned subsidiary KPower RE Sdn Bhd has inked a heads of agreement for the acquisition of five million shares in One River Power, which will give it 29.1MW hydropower plants in Kota Marudu, Sabah.
It said the acquisition of the plants, which are partly operational, are in line with its asset ownership business model for long-term dividend sustainability.
“These assets, which will be fully operational within 12 months, represent a strategic acquisition for us as it diversifies our assets portfolio.
"This acquisition is also consistent with the vision and intention of the Group’s asset ownership business model for long-term dividend sustainability.
"This will enable KPower to expand our income streams and further strengthen our position in the sustainable energy and utilities sector, said executive chairman Mustakim Mat Nun in a statement.
The proposed acquisition is deemed a related-party transaction as Mustakim is a director and major shareholder of the ultimate holding company of Pristine Falcon, OHP Ventures Sdn Bhd.
KPower group CEO and shareholder Amirul Afif Abd Aziz meanwhile is also a director and major shareholder of OHP Ventures.
By virtue of their interests in OHP Ventures, both individuals have indirect shareholdings in One River Power and Pristine Falcon.
The sale of the shares requires the consent of Inno Hydropower (B) Sdn Bhd as the beneficial owner of 30% of the sale shares and holder of the call option’s right to acquire 10% of the Sale Shares from Pristine Falcon.
The sale shares are also subject to conversion by E&E Catalyst Sdn Bhd, which holds 10 million preference shares in One River Power.
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