PETALING JAYA: PRG Holdings Bhd’s 54.19% subsidiary Furniweb Holdings Limited is acquiring the remaining 62.75% equity interest in smart saving solutions company Energy Solution Global Limited (ESGL) for HK$58.19 million (RM31.42 million) from Datuk Ng Yan Cheng.
This proposed acquisition will be satisfied via cash and the issuance of new Furniweb shares.
A filing with Bursa Malaysia showed that upon completion of this acquisition, ESGL will be a wholly owned subsidiary of Furniweb hence will allow Furniweb to fully recognise ESGL’s earnings.
As it is anticipated that ESGL’s business will likely contribute more than 25% of PRG’s profits in the future, PRG is also proposing a diversification of its business to include the energy efficiency business.
To recall, back on Nov 1, 2021, PRG had announced the acquisition by Furniweb of a 37.25% equity interest in ESGL for up to HK$9.56 million via cash from vendors Pua Lay Cheng and Lee Eng Lock. That initial acquisition was completed on Dec 13, 2021.
For this further purchase, PRG is looking to satisfy this acquisition via a combination of shares and cash. Some 25% of the purchase consideration HK$14.55 million will be satisfied by the allotment and issuance of 41.57 million Furniweb shares at an issue price of HK$0.35 per share.
The next 25% of the purchase consideration in the sum of HK$14.55 million will be paid by cash on a date six months from the completion date.
Lastly, the remaining 50% of the purchase consideration or HK$29.1 million will be paid if, and only if, ESGL achieves the profit guarantee that the audited consolidated profit after tax of ESGL for the period from Jan 1, 2022 to Dec 31, 2023 is not less than RM18.6 million. If ESGL fails to achieve the profit guarantee, the vendor will compensate Furniweb for the differences.
Commenting on the latest corporate exercise, PRG group executive vice-chairman Datuk Lua Choon Hann (pix) said ESGL is an energy services company accredited by the National Environment Agency of Singapore with an orderbook of S$50 million (RM160 million). This comprises job wins from data centre projects such as AirTrunk, and contracts from big corporations in Singapore such as Changi Airport and Systems on Silicon Manufacturing Company Pte Ltd.
“This proposed acquisition is part of the group’s long-term strategy to venture into the energy efficiency business and improve the financial position of PRG group. As energy prices will be on the rise in the future, saving energy will be the main focus of many companies as their cost-cutting measures. Moreover, reducing energy consumption is also a sustainability initiative as it helps to reduce the greenhouse gases that contribute to global warming.”