by SHAFIQQUL ALIFF / pic by BLOOMBERG
IPMUDA Bhd has plans to acquire renewable energy (RE) and hospital assets for collective consideration of almost RM192.4 million as the company diversifies for growth.
The building and engineering solutions provider has entered into five exclusive heads of agreements with related parties and third-party vendors for two proposed acquisitions of RE assets and proposed acquisition of a hospital, according to an exchange filing last Friday.
“The acquisitions provide a unique opportunity for the group to acquire high-quality assets in line with our strategy to diversify our business streams to include the RE business.
“This is an opportune time for our RE and healthcare acquisitions as it will also allow us to capitalise on the favourable market conditions,” Ipmuda CEO Jeffri M Yusup stated in a release last Friday.
He said the company intends to increase its presence in the healthcare sector, particularly to tap into the opportunities for the underserved middle-income segment.
Ipmuda has proposed to purchase a solar energy asset from Jentayu Solar Sdn Bhd for RM11.1 million by acquiring 100% equity interest in Jentayu Solar ordinary shares.
The group also proposed to buy a hydro energy asset by acquiring 70% equity interest in ordinary shares, and 100% of the redeemable preference shares of Telekosang Hydro One Sdn Bhd and Telekosang Hydro Two Sdn Bhd, collectively Telekosang, and 100% of junior sukuk in Telekosang Hydro One, all for a total consideration of RM163.3 million.
Ipmuda also planned to acquire 100% equity interest in ordinary shares of Ultimate Forte Sdn Bhd, the operator of a paediatrics and obstetrics and gynaecology specialist hospital, Ohana Specialist Hospital, in Sri Rampai, Kuala Lumpur, for a consideration of up to RM18 million.
These proposed acquisitions would be satisfied via cash and/or issuance of new Ipmuda shares, its filing stated. Jentayu Solar, Senja Optima Sdn Bhd (owns 70% equity interests in Telekosang Hydro One and Telekosang Hydro Two), Telekosang Hydro One, Telekosang Hydro Two and Ultimate Forte are collectively referred to as the target companies.
Jeffri said the proposed acquisitions enable the group to generate consistent profits and cashflow to improve its long-term finances.
“This is further supported by the new leadership line-up with enhanced governance and expertise, particularly in RE and healthcare,” he added.
Jentayu Solar owns and operates a 5.99MW solar power plant in Pokok Sena, Kedah, which has a 21-year concession period from October 2019. The plant generates an annual average energy yield of 12.7 GWh.
Telekosang is currently developing a 40MW small hydropower plant project at Sungai Telekosang in Tenom, Sabah.
Ultimate Forte operates the Ohana Specialist Hospital that has a capacity of 30 beds.
Ipmuda also announced the sale of its 5.13-acre (2.07ha) property in Section 13 in Petaling Jaya, Selangor, to Pixel Valley Sdn Bhd for a total consideration of RM82 million, signifying a RM65.2 million gain, based on the carrying book value of the land.
As a result, there will be an increase in the group’s net tangible asset per share from 49 sen to RM1.14 based on the June 30, 2020, audited accounts.
Following through from the asset rationalisation exercise, Ipmuda is proposing a special dividend distribution amounting to RM30.44 million on the basis of 30 sen per ordinary share based on Ipmuda’s existing issued shares.
The company said the special dividend payment is expected to be made in the fourth quarter of 2021 (4Q21), following the completion of the proposed property sale.
The group is also proposing a bonus issue of 101.5 million shares on the basis of one bonus share for every one existing Ipmuda share, together with 152.2 million free detachable warrants on the basis of three warrants for every two existing shares held.
Additionally, Ipmuda is proposing a renounceable rights issue of 101.5 million rights shares on the basis of one rights share for every one existing Ipmuda share.
The rights issue will be at an issue price of 30 sen per rights share, raising RM30.4 million for the group. The group expects the completion of the exercise by 4Q21.
Trading in Ipmuda shares will resume today. The stock was last traded at RM1.87 before the noon break last Thursday, valuing the company at RM189.73 million.