KUALA LUMPUR (Aug 11): Reservoir Link Energy Bhd has received shareholders’ approval to acquire Founder Energy Sdn Bhd (FESB), enabling the oil and gas well services group to diversify into renewable energy-related businesses.  

In a statement, Reservoir Link said the approval for the acquisition of a 51% stake in FESB for RM21.2 million was received during a shareholders meeting today.

It added that the acquisition will be paid for through a combination of cash of RM8.46 million and issuance of 18.15 million shares at an issue price of 70 sen each to Lee Seng Chi, the sole shareholder and director of FESB.

“With this acquisition, FESB and Solar Bina Sdn Bhd will enter into an agreement to transfer the identified business and assets from Solar Bina into FESB for an agreed sum to be based on the net asset value determined at a specific date,” Reservoir Link said.

The group said the diversification into renewable energy business and related activities is expected to contribute more than 25% of its net profit moving forward.

“As a result of the acquisition, Reservoir Link will be guaranteed a profit of RM13.8 million over next two years. The acquisition will be another income stream to the group,” said the group’s executive director Thien Chiet Chai.

Thien added that the solar renewable energy outlook in Malaysia remains bright along with government-driven initiatives to increase solar renewable energy, such as 1000-megawatt from the Large Scale Solar programme and 500MW from the Net Energy Metering 3.0 programme.

“We [Reservoir Link] intend to secure potential projects from solar engineering, procurement, construction and commissioning players.

Reservoir Link’s share price closed half a sen or 1.05% higher at 48 sen, giving the group a market capitalisation of RM136.8 million.