KUALA LUMPUR: Cepatwawasan Group Bhd's wholly-owned subsidiary Cash Nexus (M) Sdn Bhd has inked a deal to dispose of a 40% stake in Cash Horse (M) Sdn Bhd, which operates a 12MW biomass power plant in Sandakan, Sabah, to its Australia Securities Exchange-listed subsidiary for RM31.61mil cash.
The group said in a filing with Bursa Malaysia, the conditional share sale agreement was signed with Timah Resources Ltd, which is a 69.8%-owned subsidiary of Cash Nexus.
In its rationale for the disposal, the group said it had diversified into the renewable energy sector as part of a long-term strategy to hedge against volality in the crude palm oil market. However, the group said the value is not currently reflected in its share price.
"The proposed disposal will help highlight and substantiate the value of Cepatwawasan's renewable assets and provide access to greater liquidity through the trading of its Timah shares, which would undoubtedly benefit from this exercise, while still maintaining a majority stake in its renewable assets," it said.
According to the filing, the original cost of investment in Cash Nexus for the sale shares was RM23.5mil, incurred in 2009 and 2024.
As at Dec 31, 2024, Cash Horse reported a profit after tax of RM2.33mil and net assets of RM77.41mil.
The proposed disposal is expected to result in a pro forma gain on disposal of about RM650,000 for Cepatwawasan - being the difference between the disposal consideration and 40% of the audited net assets as at Dec 31, 2024.
