Astern Technologies (SAG Renewables) Acquired by Reservoir Link Energy for RM10.5 mil

reservoirlink acquires SAG Renewables

Summary:

  • Reservoir Link Energy Bhd (RLE) is acquiring a 100% stake in SAG Renewables Sdn Bhd (SAGR) for RM10.5 million.
  • SAGR owns 13 operational solar energy collector sites serving 9 clients, providing immediate revenue generation potential.
  • This acquisition supports RLE’s goal of reaching 100 MWp renewable energy capacity by 2025.
  • Funding will come from a mix of internal funds and bank loans.
  • Completion is expected in Q1 2024.
  • RLE’s share price remained unchanged at 32 sen after the announcement.

Insights:

  • This acquisition marks a significant step for RLE in expanding its renewable energy portfolio and diversifying its revenue streams.
  • The operational assets acquired from SAGR provide immediate return on investment and align with Malaysia’s national energy transition roadmap.
  • The move towards renewable energy could attract environmentally conscious investors and potentially boost RLE’s market value in the long run.
  • However, using bank loans might increase RLE’s debt burden and affect its profitability in the short term.
  • Investors should monitor the completion of the acquisition and its impact on RLE’s financial performance in the coming months.

Original Content

KUALA LUMPUR (Nov 14): Reservoir Link Energy Bhd has proposed to acquire a 100% stake in SAG Renewables Sdn Bhd (SAGR) for a total purchase consideration of RM10.5 million, its Bursa Malaysia filing showed on Tuesday.

The group said its wholly-owned subsidiary, Reservoir Link Renewables Sdn Bhd, had entered into a share sale agreement with SAGR’s parent company SAG Green Tech Sdn Bhd (SGT) for the proposed acquisition.

SGT is principally engaged in the installation of non-electric solar energy collectors.

“The proposed acquisition represents an opportunity for the group to expand its revenue-generating assets. The identified assets have been installed on 13 sites for nine clients, and operational since 2022.

“This allows us to capitalise on sustainable income streams immediately upon completion of the proposed acquisition.

“Furthermore, the proposed acquisition will contribute to the group’s renewable energy (RE) ambition of 100 MWp by 2025,” it said.

Meanwhile, the group said the proposed acquisition will be funded through a combination of internally generated funds and bank borrowings.

The proposed acquisition is expected to be completed by the first quarter of next year.

Shares in Reservoir Link closed unchanged at 32 sen, giving it a market capitalisation of RM98.24 million.

source: https://theedgemalaysia.com/node/689945

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