KUALA LUMPUR (Aug 7): Cepatwawasan Group Bhd (CGB) is undertaking an internal restructuring to raise its effective interest in power generation subsidiary Mistral Engineering Sdn Bhd to 81.73 percent from 62.71 percent currently.

This is in order to comply with the Sustainable Energy Development Authority Malaysia's (SEDA) requirement for Mistral to be a Malaysian majority-owned entity to participate in the feed-in-tariff scheme, the oil palm plantation group said in a filing with Bursa Malaysia today.

Mistral operates a biogas power plant and is a wholly-owned subsidiary of Timah Resources Ltd (TML), a company listed on the Australia Securities Exchange Ltd.

CGB has an indirect interest in Mistral through wholly-owned unit Cash Nexus (M) Sdn Bhd, which holds a 62.71 percent stake in TML.

On July 15, TML's shareholders approved a new issue of 9.62 million shares in Mistral at a value of RM1.64 per share, totalling RM15.8 million, to Cash Nexus in consideration for the conversion of a portion of a debt owed by Mistral to CGB.

“On completion of the internal restructuring, the new ownership structure of Mistral will be 51 percent-owned by Cash Nexus and 49 percent-owned by TML,” CGB said.

CGB’s effective shareholding in Mistral would rise to 81.73 percent, taking into account Cash Nexus’ 62.71 percent ownership in TML.

“Without the restructuring, Mistral would have a drastically reduced source of income and might not be viable.

"In addition, Mistral will save yearly interest costs of RM850,212 as a result of the reduction in debt to CGB of RM15.8 million," it explained.

CGB said the internal restructuring was expected to be completed within a reasonable time frame and the processing time required for the statutory documentation.