JUST months before Pimpinan Ehsan Bhd (PEB) would have completed the acquisition of reNIKOLA Holdings Sdn Bhd, a significant development is taking place.

       Thailand-listed energy player B.Grimm Power Public Co Ltd is now poised to become a major shareholder of reNIKOLA after it proposed to pump in some RM367mil in cash into the latter for a 45% stake.

       So, when reNIKOLA is eventually injected into PEB, as per the original plan first announced in May this year, B.Grimm Power will emerge with a 40.6% stake in PEB.

       This will be paid via 285.22 million new PEB shares at RM1.2867 apiece.

       The shareholders of reNIKOLA are Boumhidi Abdelali (Adel), Tengku Zaiton Sultan Abu Bakar and seasoned corporate personality Lim Beng Guan, who has an indirect stake. They will collectively own 49.6% of PEB when the deal goes through.

       The exercise does seem a bit complicated and may have been more simple if B.Grimm Power acquired a block of shares of the listed PEB, post the latter’s acquisition of reNIKOLA.

       So why wasn’t it planned like that?

       “It is all about timing. In the last six months during the lockdowns, significant developments have taken place in the renewable energy (RE) space. reNIKOLA has many opportunities to pursue and deals to strike,” Adel, who is the managing director of reNIKOLA, tells StarBizWeek.

       According to him, the company has been in discussions with B.Grimm Power, which commands a market cap of about 114 billion Thai baht (RM14bil), since the middle of the year. And it needed to make this happen now in order for reNIKOLA not to miss out on the opportunities.

       “B.Grimm Power not only brings us fresh capital. It is a respectable world-class energy company and we can leverage on its strong expertise and technical know-how in the RE sector.

       “We will also now have a strong war chest to seize the tremendous growth opportunities in the RE space,” explains Adel.

       reNIKOLA has a portfolio totalling 418 megawatt peak (MWp) capacity of solar assets (both in operation and under development) across four sites in Kedah, Pahang and Perlis. It is currently exploring acquiring additional RE assets in the country with a capacity of not less than 50 megawatt (MW).

       Notably, it has a target to hit one gigawatts peak (GWp) of capacity in the next five years, which Adel believes can be “accelerated” with the proposed entry of B.Grimm Power as a strategic shareholder.

       The investment arm of B.Grimm group, a multinational conglomerate founded by the Link family in 1878, B.Grimm Power has 737 MW of renewable power plants in operation.

       These consist of solar projects in Thailand and Vietnam, wind projects and waste-to-energy in Thailand and hydropower projects in Laos.

       It also operates a number of solar rooftop projects in Thailand and the Philippines and is developing several renewable projects with a total capacity of 126 MW that includes wind project in Poland, hydropower projects in Laos and solar hybrid project in Thailand.

       With cleaner energy becoming the new global trend, Adel says there are opportunities and synergies to be tapped in the renewable ecosystem with both parties joining forces.

       The B.Grimm group, for one, has been scouting for assets in the region, including Malaysia where it plans to develop RE power plants through the proposed deal.

       Malaysia has a target of achieving 31% RE in the power capacity mix by 2025 and to meet this goal, 1,178 MW of new RE capacities will be developed in Peninsular Malaysia from 2021 onwards.

       As for reNIKOLA, Adel says renewables remain the focus and the plan is to transform PEB into a pure play RE company once the injection of assets into the latter is completed – expected by June 2022.

       Beyond Malaysia, he says that reNIKOLA/PEB aspires to leverage on the combined strength to be a regional player, citing Indonesia where B.Grimm Power looks to have a presence, as among the markets on the radar.

       PEB is currently classified as a cash company after it sold its principal subsidiary TRIPLC Bhd in 2018. It has close to RM70mil cash as at end-Sept.

       However, with B.Grimm and existing vendors of reNIKOLA holding 40.6% and 49.6% in PEB respectively, upon completion of the exercise, they will have to seek an exemption from the obligation to undertake the mandatory offer to buy the remaining PEB shares.

       PEB would then have to meet Bursa Malaysia’s public shareholding spread requirement.

       For this, it will have to issue new shares to make up for the public float.

       Going by projects in the pipeline and prospects in the space with more “bullets” for expansion, some reckon the stock could attract funds and investors.

       But before that, PEB would need approval from several authorities, including the Energy Commission, and non-interested shareholders of PEB at an EGM.

       Shares of PEB closed on sen up at RM1.68 yesterday.