This article first appeared in The Edge Malaysia Weekly on April 15, 2024 - April 21, 2024

Vsolar Group Bhd’s balance sheet as at Dec 31, 2023 did not indicate any urgency to raise fresh funds given that it had net cash of RM25 million and zero debt.

Furthermore, the company had sought more time from the regulators to utilise proceeds that were raised from its previous rights issue and share placements.

Even so, it went ahead with its proposed four-to-one rights issue that came with two free warrants, its cash call raising RM33.61 million, although it was undersubscribed.

Vsolar’s single largest shareholder, AE Multi Holdings Bhd, a public-listed firm, refrained from subscribing for the rights call, but another public-listed company, Fast Energy Holdings Bhd, pumped in RM14 million for a 28.15% stake. Vsolar’s core businesses are the development of business application software and building and maintaining the installation of solar photovoltaic rooftop systems.

AE Multi Holdings bought into Vsolar in November 2021. The share purchase came after AE Multi completed a rights issue of 1.44 billion shares. Prior to that, Fintec Global Bhd was the major shareholder, holding a 15.67% stake, but it sold down its stake in June 2021.

With new money coming in, Vsolar’s happy problem of having too much money but too little time to utilise it may well continue.

Interestingly, Fast Energy is also cash rich with net cash of roughly RM14 million as at end-2023 — the amount it paid to subscribe for Vsolar’s rights issue. Fast Energy itself had just completed a rights issue last month, raising some RM19.37 million which it said was partially to be used for a proposed diversification plan to venture into the wholesale, distribution and retail of consumer electronic goods.

Subscribing for the Vsolar rights issue allows it to capitalise on the long-term growth potential of the renewable energy sector, Fast Energy had asserted. Does Fast Energy now plan to take over or subscribe for another company’s rights issue so that it can venture into the consumer electronic goods segment?

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