Taliworks forays into renewable energy with RM144m investment to acquire stakes in four solar projects

Taliworks forays into renewable energy with RM144m investment to acquire stakes in four solar projects
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KUALA LUMPUR (Nov 30): Infrastructure group Taliworks Corp Bhd is venturing into the renewable energy space by acquiring majority economic interests in four solar projects with an aggregate capacity of 19MW within the vicinity of the Kuala Lumpur International Airport, which will see it forking out RM144.05 million for the investment.

In a statement, Taliworks said it inked a conditional share sale and purchase agreement today with TerraForm Global Operating LP and several of its subsidiaries for the acquisition, following a competitive sale process carried out by TerraForm Global.

Under the SPA, Taliworks' unit Taliworks Renewables Sdn Bhd (TRSB) will acquire the entire equity interests in Sunedison Solar Holdings 1 Pte Ltd (SE1), Sunedison Solar Holdings 2 Pte Ltd (SE2), Sunedison Solar Holdings 3 Pte Ltd (SE3) and TerraForm Global Operating (Malaysia) Sdn Bhd (TGOM).

The respective subsidiaries of SE1, SE2 and SE3 — namely Fortune 11 Sdn Bhd, Corporate Season Sdn Bhd and Silverstar Pavilion Sdn Bhd (collectively the project companies) — are holders of the feed-in approvals granted by the Sustainable Energy Development Authority (SEDA) for the solar projects. TGOM, meanwhile, is responsible for the operations and maintenance of the solar projects.

The investment sum comprises the purchase consideration for the equity interests in SE1, SE2, SE3 and TGOM, and a shareholder's loan to be injected into Fortune 11 and Silverstar Pavilion to repay an outstanding loan due to a subsidiary of TerraForm Global.

The proposed acquisition is conditional upon obtaining approval from SEDA for the change in shareholding in the project companies, said Taliworks. TRSB is now in talks with SEV Renewables Sdn Bhd to acquire the remaining equity interest in the project companies, Taliworks said.

Taliworks executive director Datuk Ronnie Lim said the investment, which the group intends to fund using internal funds, marks the group's first foray into the renewable energy sector that will ultimately become a platform for the group to participate in future RE-related projects.

"With the Malaysian government’s target to increase the usage of renewable energy in the generation mix to 20% by 2025, we believe that the renewable energy market has promising prospects.

"This transaction is in line with our investment strategy to acquire mature brownfield assets with sustainable recurring income to support the dividend policy committed to our shareholders. We are also encouraged that this acquisition will be accretive to Taliworks group’s future earnings," he added.

Shares of Taliworks went down by 0.5 sen or 0.63% to close at 79.5 sen per share today, for a market capitalisation of RM1.60 billion.

Tan Choe Choe