Serba Dinamik plans to buy 49% stake in firm involved in Laos hydropower project

KUALA LUMPUR (Oct 17): Serba Dinamik Holdings Bhd plans to acquire a 49% stake in OHP Ventures Inc (OHP Ventures) for US$800,000, or approximately RM3.33 million, to expand its engineering, procurement, construction and commissioning business (EPCC) segment and capabilities.

In a filing to Bursa Malaysia yesterday, Serba Dinamik said, OHP Ventures has a joint development agreement with Thavone Athsamouth, to develop, finance, construct, commission and operate and maintain two mini hydro installations with an aggregate capacity of 30 megawatts in Houaphan, Laos.

The project, which was started in July, will be completed by January 2022, it said.

OHP Ventures also owns 70% of the issued and paid-up shares in Nam Taep 1,2,3 Hydropower Co Ltd (NT), which holds the two concessions for the Laos project.

NT inked two power purchase agreements with Électricité du Laos in 2017 for the sale and purchase of the net electrical output generated from the hydropower plants.

Serba Dinamik said its wholly-owned unit, Serba Dinamik International Ltd (SDIL), has inked a share sale and purchase agreement with OHP Ventures Sdn Bhd, which currently owns the entire issued and paid-up share capital of OHP Ventures, for the stake buy. 

On the completion of the acquisition, OHP Ventures will become a 49%-owned associate company of SDIL, which gives Serba Dinamik an effective 34% stake in NT.

“The proposed acquisition is expected to enhance Serba Dinamik Group’s financial position and profitability,” the group said, adding the proposed acquisition should be completed by the fourth quarter of this year.

NT is also the company that awarded an EPCC contract to SDIL in July for the Laos project with a contract value of US$66.2 million or about RM275.2 million.

“In line with our business strategy, we will further expand our business into asset ownership. Through this proposed acquisition, it will also allow us to participate in more projects in Laos,” said Serba Dinamik’s group managing director/group chief executive officer Datuk Dr Mohd Abdul Karim Abdullah in a separate statement.

“On top of being able to reap benefits from the projects operated by OHP Ventures, the proposed acquisition will also enlarge our market presence and brand recognition in Laos which, in turn, will enable us to position ourselves to offer our expertise in EPCC and also the operation and maintenance of the hydropower plants upon completion of the EPCC works awarded by NT,” he added.

Serba Dinamik shares rose four sen, or 0.98%, to RM4.10 yesterday, for a market value of RM6.02 billion. It was listed in February last year at RM1.50 apiece.

This article first appeared in The Edge Financial Daily, on Oct 17, 2018.

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