KUALA LUMPUR (Jan 3): Kejuruteraan Asastera Bhd (KAB) is expanding into the solar energy industry via the proposed acquistion of a 30% stake comprising 37,500 shares in the enlarged issued share capital of LeveragEdge Sdn Bhd (LSB) for RM2.1 million.

In statements to Bursa Malaysia today, electrical and mechanical engineering company KAB said KAB had today entered into a heads of agreement with LSB and Loo Chun Keat. KAB said LSB provides solar photovoltaic and energy efficiency solutions while Loo is an existing director in LSB.

KAB said : "The proposed investment is part of the group’s expansion strategy into the solar energy industry. The principal terms and conditions outlined in the heads of agreement is subject to the share sales and shareholders agreement or any such other agreements relevant to the proposed investment (definitive agreements) to be entered into between KAB, LSB and Loo."

"The parties intend to enter into negotiations and come into agreement regarding the investment and acquisition of 30% ordinary shares in the enlarged and issued share capital of LSB by KAB. A total investment of RM2.1 million shall be payable by KAB subject to the payment terms or conditions. KAB will have majority control on the board of directors, which shall have the overall control and management of LSB," KAB said.

KAB managing director Datuk Lai Keng Onn said in one of the statements the acquisition is key for KAB as its marks the group's foray into the solar business.

“I believe the solar sector has great potential, supportive favourable government policies and we would like to be part of the sustainable energy ecosystem,” Lai said.

At Bursa's 12:30pm break today, KAB's share price settled unchanged at RM1.02 for a market capitalisation of RM376.49 million. The stock was traded between RM1.01 and RM1.03 so far today.