KUALA LUMPUR (Aug 7): Passenger-vehicles charterer Gunung Capital Bhd has proposed the acquisition of five hydro plant operators for a combined value of RM80.9 million, in a bid to boost the group’s renewable energy (RE) portfolio.

“This proposed acquisition is expected to significantly boost Gunung’s RE (small hydro) portfolio by an additional 56 MW of estimated installed capacity,” the group said in a filing with Bursa Malaysia.

It added that it expects a topline contribution of RM78 million upon commissioning of the hydro plants.

Following the announcement, Gunung’s share price attracted fresh buying to rise by 24 sen or 22.86% to RM1.29 as at 3.30pm for a market capitalisation of RM319 million.

Gunung said its 90%-owned subsidiary Gunung Hydropower Sdn Bhd — which is principally involved in building and operating mini-hydropower plants — entered into an indicative term sheet with the hydro plan operators today.

The subsidiary is proposing to acquire a 70% stake in Zeqna Corporation Sdn Bhd for RM24.6 million and a 70% stake in Koridor Mentari Sdn Bhd for RM5.5 million.

It has also proposed the purchase of a 70% stake in Denai Delima Sdn Bhd, 100% stake in Cabaran Hijau Sdn Bhd and 10% stake in Selat Serasi Sdn Bhd for an aggregate value of RM50.8 million.

In a separate statement, Gunung said it is poised to become a leading player in the Malaysian RE sector as it continues building and operating small-scale hydro plants.

The group, led by its new management team, is upbeat about its long-term growth prospects, on the back of its strategic plan to create a sustainable and recurring revenue stream.

Gunung executive director Tan Sri Dr Ali Hamsa said the group is confident on the prospects of RE moving forward, more so as there is a robust growing awareness and urge for governments globally to transform the world’s traditional energy system with energy-efficient renewable power sources.

This is also in line with the government’s aim to achieve 20% of the country’s electricity generation to be from renewable sources by 2025

“I have full faith and confidence in the new management of Gunung Capital, led by Datuk Yap Yee Ping, to bring the group to the next level. This is evident from the turnaround in our first quarter financial year ending Dec 31, 2020,” said Ali Hamsa.

“We will leverage on Gunung Capital’s sturdy balance sheet, with a total of cash and cash equivalents of more than RM50 million and insignificant borrowings, to capture opportunities that promote business expansion,” he added.