Reservoir Link’s Shareholders Approve Acquisition of Founder Energy Sdn Bhd
Acquisition Comes With Guaranteed Profit After Tax of RM13.8 Million For Next 2 Years
Kuala Lumpur, 11 AUGUST 2021 – Reservoir Link Energy Bhd (“Reservoir Link” or the “Group”), an upstream oil and gas well related services provider in Malaysia, has received its shareholders’ approval to acquire a 51% stake in Founder Energy Sdn Bhd (“FESB”) for a purchase consideration of RM21.2 million and for the diversification of its business to renewable energy related businesses during the virtual Meeting of Members that was held this morning.
The RM21.2 million purchase consideration will be satisfied through a combination of cash of RM8,464,080 and issuance of 18,150,000 shares, in 2 tranches, at an issue price of RM0.70 each to Lee Seng Chi, the sole shareholder and director of FESB. With this acquisition, FESB and Solar Bina Sdn Bhd (“Solar Bina”) will enter into an agreement to transfer the identified business and assets from Solar Bina into FESB for an agreed sum to be based on the net asset value determined at a specific date.
The proposed diversification, to include renewable energy business and related activities, in turn is expected to contribute more than 25% of the Group’s net profit, moving forward.
Reservoir Link executive director Thien Chiet Chai said, “We are truly excited with the acquisition that our shareholders have approved. This acquisition is a big step for us towards the vision to be a true energy company. As a result of the acquisition, Reservoir Link will be guaranteed a profit of RM13.8 million over the next 2 years. The acquisition will be another income stream to the Group.
The solar renewable energy outlook in Malaysia remains bright along with the initiatives to increase solar renewable energy by the Malaysian government such as 1000MW from Large Scale Solar programme and 500MW from Net Energy Metering 3.0 programme. We intend to secure potential projects from solar EPCC (engineering, procurement, construction and commissioning) players. I believe that we are well on our way to achieve our goals in energy transition and we are committed to drive Reservoir Link’s growth with the addition of our renewable energy business.”