KUALA LUMPUR (Jan 4): Straits Energy Resources Bhd has proposed to include telecommunication and network services as part of its principal activities following the acquisition of a telecommunication engineering company in 2021 and an internet service provider in 2022.

The company said that its new business activities in the telecommunication and network service will contribute 25% or more of the net profits and/or result in a diversion of more than 25% of the net assets moving forward.

“The board anticipates that the telecommunication and network services business will largely contribute to the group's earnings in the future as it will continue to identify and secure additional projects resulting in further expansion of this business segment in the long term,” Straits Energy wrote in a Bursa Malaysia filing.

Therefore, the board proposes to seek approval from its shareholders for the proposed diversification at its coming extraordinary general meeting.

The company's 75%-owned subsidiary, Straits Technology Solutions Sdn Bhd, had on Dec 8, 2021 completed the acquisition of 70% equity interest in Straits CommNet Solutions Sdn Bhd.

Subsequently on Dec 16, 2022, Straits Technology Solutions entered into a share sale agreement with ViewQwest Sdn Bhd for the acquisition of 70% equity interest in Macro Lynx Sdn Bhd.

As at the last practicable date on Dec 19, 2022, the group operates in four core business segments comprising oil bunkering and shipping-related services, inland transportation services, port management and facility management services, and ship-to-ship operation.

The oil bunkering and shipping-related services contribute to more than 99% of the group's revenue, Straits Energy Resources said.

Straits Energy Resources also noted that the proposed diversification is not expected to have any immediate material effect on the earnings of the group for its financial year ending Dec 31, 2023.

UOB Kay Hian Securities (M) Sdn Bhd was appointed as the adviser for the proposed diversification.

On Wednesday, shares of Straits Energy Resources were up half a sen or 4.17% to 12.5 sen, valuing the group at about RM112.86 million.

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