This article first appeared in The Edge Financial Daily on October 19, 2018
KUALA LUMPUR: JAKS Resources Bhd is looking to renewable energy as a new source of revenue for the group, which currently has businesses in power generation, construction and property development.
JAKS group chief financial officer Steven Ang said the group will be looking at projects focused on solar and hydro power, particularly in Vietnam, Indonesia and Malaysia.
“Renewable energy is something new for the group, but the [energy] market is moving towards that direction as a lot of countries have allocated roughly 25% of their energy generation to be sourced from renewables, so in today’s market you have to adapt to changes in country policies.
“We are open to collaboration with partners for these renewable energy projects [especially for larger-scale ones],” he told reporters after the group’s extraordinary general meeting (EGM) yesterday.
At the EGM, JAKS shareholders passed the resolution for its proposed rights issue of up to 278.16 million warrants on the basis of one warrant for every two existing ordinary shares.
Based on the indicative issue price of 25 sen per warrant, the gross proceeds to be raised from the proposed rights issue of warrants will raise up to RM69.54 million. Of that, the group intends to use RM47.34 million to expedite the construction of its US$1.87 billion (RM7.77 billion) coal-fired thermal power plant in Vietnam, while RM11.5 million will be used for the partial repayment of bank borrowings and RM10 million for renewable energy projects.
The Vietnam power plant is currently at 30% completion, and is expected to be completed by 2020.
On the proposed sale of its 51% stake in Evolve Concept Mall at Ara Damansara, Selangor, Ang said the group is still set on selling, but acknowledges that things have been tough in the commercial property market.
“The market [for commercial properties] has been tough. However we have seen improvement in the tenancy [rate] of the mall, which is currently at 60% [occupancy],” he said.