Thursday 28 Mar 2024
By
main news image

KUALA LUMPUR (Nov 13): Photovoltaic products manufacturer Tek Seng Holdings Bhd said Taiwan-listed Solartech Energy Corp (SEC) will buy over
3.17 million shares or a 20.92% stake in its 86.1%-owned unit, TS Solartech Sdn Bhd, for RM13.17 million.

In a press statement today, Tek Seng said SEC would subscribe for the shares through a subscription agreement, within five market days.

Apart from the stake purchase, SEC is investing RM87.7 million in TS Solartech through the issuance of 87,701 redeemable non-cumulative preference shares at an issue price of RM1,000 each.

It said this would be done by way of supplying two units of solar cells turnkey line, with the manufacturing capacity of producing solar cells that can collectively generate 140 megawatts (MW) of electricity per annum.

“This would increase TS Solartech’s production lines to meet demand and orders, and help achieve a better economics of scale operations,” it said.

To recap, SEC had proposed an investment of RM100 million in TS Solartech in September. The Taiwanese firm had inked a Memorandum of Understanding (MoU) with TS Solartech on Sept 11, for a “strategic alliance between the parties”.

Notably, Tek Seng — which is primarily involved in the manufacturing and trading of PVC sheeting, but ventured into solar photovoltaic cell manufacturing business back in 2012 through TS Solartech Sdn Bhd — was one of TheEdge Research’s Stocks with Momentum on Oct 21.

TheEdge Research had then noted that the solar division was gaining more prominence with the rise in demand for solar energy, and is likely the reason Tek Seng was seeing increased interest.

Tek Seng’s statement today, further read that the investment from SEC will allow TS Solartech to provide experience and input, and further develop TS Solartech’s solar business.

“Hence, it is expected to contribute positively to the earnings, as well as shareholders’ value of Tek Seng group, in the medium to longer term,” it said.

Tek Seng's Executive Chairman Loh Kok Beng said this partnership with SEC will provide an immediate cash injection and expansion of turnkey facilities of RM87.7 million, which significantly minimises the impact on its cash flow and gearing, compared with relying entirely on internally-generated funds and/or bank borrowings. At the same time, TS Solartech still remains a subsidiary of Tek Seng.

      Print
      Text Size
      Share