KUALA LUMPUR: ETI Tech Corporation Bhd is forming a collaboration wth China-based Castel Engineering Ltd, to provide “renewable and smart city solutions” to governmental and commercial organisations in Malaysia.

In a filing with Bursa Malaysia on June 02, ETI Tech said that it had entered into a memorandum of understanding (MoU) with Castel, to form a collaboration company in Malaysia for the above purposes.

According to ETI Tech, Castel is principally involved in renewable energy, smart city infrastructures, mobility and transportation tracking, and industrial and systems engineering.

It manufactures wind turbines, photovoltaic, LED and solar products, satellite communication and intelligent transportation systems, and government and enterprise application solutions, among others.

The announcement also stated that Castel is a unit of the China Aerospace Science and Technology Corp, which has seven research and development centres, six public-listed companies and over 100 enterprises and institutes with more than 135,000 employees in China and Hong Kong.

“The MoU is to complement and strengthen ETI Tech’s portfolio in the green and renewable energy industry,” said the company.

ETI Tech on May 16, appointed Zarul Ikhwan Zarul Ahmad, the son of businessman Datuk Zarul Ahmad Zulkifli, as an executive director.

The fact that Zarul Ahmad is a substantial shareholder of Consortium Zenith BUCG, which won the Penang undersea tunnel project, has created speculation that ETI Tech could tap into the opportunities offered by the multi-billion infrastructure project.

ETI Tech’s share price spiked from 10.5 sen in early May, to a high of 15 sen in the middle of the month. It had since surrendered the gains and closed at 10.5 sen on June 02, with a market capitalisation of RM81.6 million.

The company has a loose shareholding structure, with its substantial shareholders being Nor Ashikin Khamis (4.81%), Siti Munajat Md Ghazali (4.81%) and AirAsia’s co-founder Datuk Kamarudin Meranun (4.8%) as at Aug 5 last year, according to its 2013 annual report.

This article first appeared in The Edge Financial Daily, on June 03, 2014.