KUALA LUMPUR (July 14): Shareholders of Chin Hin Group Bhd have been recommended to vote in favour of the group’s proposed disposal of its stake in Solarvest Holdings Bhd as the exercise is fair and reasonable, according to adviser M&A Securities Sdn Bhd.

M&A also added that the proposed disposal is not detrimental to the shareholders. 

Previously in May this year, the group proposed to dispose of its remaining 19.34% stake in Solarvest for RM103.28 million cash or 80 sen per share to Divine Inventions Sdn Bhd in a related party transaction (RPT).

The deal is an RPT as Divine Inventions, controlled by the Chiau family, also owns 36.6% of Chin Hin.

Chin Hin executive chairman Datuk Seri Chiau Beng Teik also owns a 1.4% direct stake in Solarvest, while Chin Hin group managing director Chiau Haw Choon owns 0.08% of the solar company.

Minus related expenses for the disposal, Chin Hin intends to utilise the entire proceeds for repayment of bank borrowings.

“The proposed disposal will also enable Chin Hin to record a one-off pro forma gain of RM35.68 million, which may vary depending on the carrying value of Solarvest shares at the time of completion of the proposed disposal,” it said.

Chin Hin’s exposure to the solar space started in 2017 when it bought 45% of large-scale solar engineering, procurement, construction and commissioning specialist Atlantic Blue Sdn Bhd for RM24.75 million.

At the time of writing on Thursday (July 14), shares in Chin Hin traded unchanged at RM3.23, giving it a market capitalisation of RM2.86 billion. 

Meanwhile, shares in Solarvest traded unchanged at 63 sen at the time of writing, valuing the renewable energy service provider at RM420.56 million.