Solarvest Holdings’ (Solarvest) wholly-owned subsidiary, Solarvest Energy Sdn Bhd, has entered into a 3 separate conditional sales and purchase agreement (SPAs) with BK Alliance Sdn Bhd to acquire 4 levels of office space and a rooftop retail unit of an on-going office building development within Bangsar South vicinity, to be known as Solarvest Tower, for MYR48.73m cash.
Maybank Investment Bank (Maybank IB) today (June 14), said they are Neutral on the acquisition – although at about market value, it will raise Solarvest’s net gearing.
Maybank IB Maintains a BUY call, with an unchanged TP of MYR1.84 on Solarvest.
The proposed acquisition involves 4 levels of office space on Levels 26 to 29 with 200 parking bays and a rooftop retail unit on Level 31. Solarvest, which is currently renting office space in Petaling Jaya, will make this new address in Bangsar South – located at the intersection of Jalan Kerinchi Kiri and Kerinchi Link – its new headquarters. Part of a 34-storey building which is now under construction – about 40% completed as at 23 May, to be completed in Mar 2028 – it will be known as Solarvest Tower.
Net gearing to rise
The acquisition price, which translates into approximately MYR1,237 per sq. ft. based on a total built-up area of 39,375 sq. ft., will be funded from internally generated funds and bank borrowings. At MYR48.73m, this represents a discount of about MYR70k or 0.14% to the property’s market value of MYR48.8m.
Maybank IB estimates Solarvest’s net gearing to rise to 0.5x from 0.3x as at end-Mar 2024. The proposed acquisition is subject to comments from non-interested shareholders and approval at an EGM.
To accommodate growing business ops
The proposed acquisition will provide an opportunity for Solarvest to own a permanent business premise to accommodate its growing business operations and staff. Furthermore, having an own HQ will allow better operating and cost efficiencies in the long term.
Maybank IB made no change to their earnings estimates for now.
