Fitters to buy 40% stake in German RE firm for RM6.6m

Fitters-Diversified-Berhad

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KUALA LUMPUR (July 22): Firefighting equipment specialist Fitters Diversified Bhd plans to acquire a 40% stake in Germany-based A.H.T. Syngas Technologies N.V. (AHT Syngas) for RM6.6 million, to move up the value chain in the renewable energy business.

In a statement today, the group said its wholly-owned subsidiary Future NRG Sdn Bhd (FNRG) will undertake the acquisition of 600,000 shares in AHT Syngas at €2.665 apiece or €1.6 million in total (approximately RM6.6 million).

Fitters, which is also into property development and construction besides renewable energy, said AHT Syngas is a leading player in designing and manufacturing of biomass and coal co-generation systems and technologies.

It said the targeted company also has a proven track record in power plant set up in various countries, such as India, Indonesia and Japan.

“Having a significant stake in AHT Syngas, Fitters will have further access to AHT Syngas' state-of-the-art technologies and will benefit from its planned expansion into Asia, including China and the Southeast Asia region,” said Fitters’ managing director Datuk Richard Wong.

“We are optimistic that this investment would go a long way towards placing us in the forefront of the renewable energy sector, and contribute positively to the group in the future,” he added.

The purchase consideration of approximately RM6.6 million will be funded by internally generated funds and the stake buy is expected to be completed by early-August 2015.

Fitters (fundamental: 1; valuation: 1.8) also noted that last year, FNRG and AHT Services agreed to collaborate to set up a joint venture (JV) company targeting the renewable energy power generation sector in the Southeast Asia region.

The intended JV company aims to further re-engineer existing AHT Services' technologies for generation of clean renewable energy from biomass gasification to suit the Southeast Asia region, it added.

In the past one year, Fitters’ counter has fallen 25.04% to close at 61 sen today, 1.5 sen or 2.52% higher from Tuesday’s close, for a market capitalisation of RM292.96 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)