Fast Energy pays RM14 million for 28.15% stake in Vsolar through rights issue

KUALA LUMPUR (April 5): Loss-making oil bunkering service provider First Energy Holdings Berhad has subscribed for 140 million shares in a Vsolar rights issue exercise for RM14 million (10 sen per share). Later, it emerged as a major shareholder of Vsolar Group Bhd.

According to Fast Energy’s stock exchange disclosure on Friday, with the appropriate issuance subscription, Fast Energy will own a 28.15% stake in Vsolar, which is involved in renewable energy, media publishing, software solutions and production house businesses. Ta.

This could be Vsolar’s single largest shareholding block post-rights issue, although the group has not disclosed all shareholding changes resulting from previous corporate exercises.

The only shareholding change disclosed on Friday involved Vsolar executive director Koo Kien Yoon, who took on 75 million shares, increasing his stake to 15.1% from just 0.01% previously. .

Koo was the only one to take on the Vsolar rights issue. AE Multi Holdings Bhd, which was Vsolar’s single largest shareholder prior to the corporate exercise, did not provide any commitments.

Vsolar’s new issuance of stock acquisition rights totaled approximately 336.09 million shares, which is significantly lower than the 644.63 million shares of stock acquisition rights available for subscription, which corresponds to an under-subscription of 47.86%.

This rights issue increased Vsolar’s total capital to approximately 497.3 million shares. If AE Multi Holdings’ shareholding remains unchanged, it would be diluted by only 5.9% based on behind-the-scenes calculations.

Priced at 10 sen each, the group will raise approximately RM33.61 million through the issuance of Vsolar rights, which will be used for working capital for solar power lease projects and railway operations.

Separately, Fast Energy told Bursa Malaysia on Friday that its investment in Vsolar would allow it to “leverage this trend and benefit from the long-term growth potential of the renewable energy sector”. Told.

FastEnergy said the move is also in line with its “mission to expand its existing green energy business and increase its revenue streams from that business.”

It may be noted that last month, FastEnergy itself concluded its own rights issue exercise, raising approximately RM19.4 million based on a price of 9 sen per issue. It was planned that 71% to 97% of the proceeds would be used for working capital, and the rest would be used for expenses for corporate activities.

FastEnergy said it will strengthen its financial position and capital base by reducing gearing levels and increasing net assets.

FastEnergy also proposed to diversify its main activities to include wholesale, distribution and retail of household appliances. The plan was approved by shareholders in October last year.

For the financial year ended December 31, 2023 (FY2023), FirstEnergy’s bank balance, including cash and term deposits, was RM14.17 million, an increase from RM9.6 million as of FY2022.

Borrowings remained fairly stable during the same period, at RM4.7 million in FY2023 compared to RM4.06 million in FY22.

The group’s net loss more than quadrupled from RM4.5 million in FY2022 to RM18.65 million in FY2023, despite a 47% increase in revenue from RM272.05 million to RM398.92 million. Expanded.

Meanwhile, Vsolar recorded a net profit of RM180,000 for the six months ended December 31, 2023 (1H 2024), while its net loss for 1H 2023 was RM10.03 million. Revenue was RM4.95 million, an increase of 4.52% from RM4.74 million in the same period last year.

Apart from the newly concluded rights issue, Vsolar has conducted several fundraising exercises in the past few years, including the July 2020 rights issue, as well as the November 2020, 2021 Also includes private placements in January 2021 and June 2021.

These fundraising activities have been completed and a total of RM68.14 million was raised, but the majority of the proceeds amounting to RM60.02 million are still unutilized. (see table)

Interestingly, these unused revenues are larger than Vsolar’s current cash vault. As of December 31, 2023, the company’s bank balance, including cash and fixed deposits, was approximately RM25.22 million (compared to RM25.66 million a year ago).

Nevertheless, it is worth noting that more than half of Vsolar’s total assets are “other investments” worth RM51.35 million kept in the illiquid assets list.

According to Vsolar’s latest annual report, the group’s “other investments” were mainly “cited investments” and “unquoted investments.”

Fast Energy’s share price closed 0.5 sen or 7.14% lower at 6.5 sen, giving the group a market capitalization of RM27.99 million.

Meanwhile, Vsolar’s share price remained unchanged at 10 sen, valuing the group at RM49.73 million.

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