KUALA LUMPUR: Straits Energy Resources Bhd
is proposing to diversify into the engineering, procurement, construction and commissioning (EPCC) business as it seeks to broaden its revenue base and reduce its reliance on oil bunkering.
In a filing with Bursa Malaysia, Straits Energy said the group plans to expand its operations into EPCC services across sectors including oil and gas, smart city and public infrastructure, high-tech industrial and data centres, renewable energy and utility infrastructure, healthcare and education.
It said the EPCC business would cover end-to-end services spanning planning and design, civil, structural, mechanical and electrical engineering, project management, procurement, construction supervision and commissioning.
The EPCC business will be undertaken through its existing subsidiary, Straits CommNet Solutions Sdn Bhd (SCS), a Construction Industry Development Board-certified Grade G7 contractor, which allows it to undertake civil engineering and building construction projects without a project value limit.
The group said the expansion would allow it to pursue higher-value contracts and participate in projects in areas such as renewable energy, data centres and smart city infrastructure.
Straits is also proposing a mandate to dispose of 7.37 million shares in Nasdaq-listed CBL International Ltd (CBLIL), representing a 26.8% equity interest, over the next 12 months. The shares may be sold in one or multiple tranches depending on market conditions.
Based on illustrative disposal prices, Straits could raise between RM10.24mil and RM28.6mil from the exercise.
However, the disposal is expected to result in a pro forma loss of between RM9.16mil and RM26.78mil, depending on the eventual disposal price.
“The proposed diversification represents a natural progression of the group's business, enabling it to leverage its technical expertise, project management capabilities and established vendor network to undertake EPCC works across a broader range of sectors.
“By assuming a broader role in project delivery, the group will be able to offer more integrated solutions to clients and capture a larger portion of the overall project value, while leveraging its existing technical expertise and project management framework,” Straits Energy said.
The proposed diversification requires shareholders' approval at an extraordinary general meeting. While shareholder approval is not technically required for the CBLIL disposal mandate, the board has decided to seek approval due to the volatility of CBLIL shares and to provide greater flexibility for the disposal.
Subject to approvals, the diversification will take effect after the EGM, while the CBLIL disposal is expected by the second quarter of 2027.
