Zecon seeks nod for RM54.36m Kuching solar land sublease
Zecon Bhd is seeking shareholders' approval for a 30-year sublease of 302 acres in Kuching, Sarawak, for a proposed 100MWac solar farm, with total rent of RM54.36 million. The sublease, from a subsidiary to a majority-owned unit, will be voted on at an extraordinary general meeting on 19 November.
PETALING JAYA (30 Oct): Zecon Bhd is seeking shareholders’ approval for a 30-year sublease of 302 acres in Kuching, Sarawak, for a proposed 100MWac solar photovoltaic farm, involving total rent of RM54.36 million.
Its wholly owned subsidiary, Zecon Renewables (Sarawak) Sdn Bhd, proposes to sublease the site from 51%-owned Zecon Solar Sdn Bhd, according to a circular submitted in a Bursa Malaysia filing on 29 Oct. Shareholders will vote on the proposal at an extraordinary general meeting on 19 Nov. The conditional sublease agreement was signed on 2 Sept.
The 122.18-hectare site lies within the planned Kota Petra Green Technology Park and forms part of Lot 471, Block 15, Salak Land District. The parent lot’s title expires on 27 Jun 2076. Rent is fixed at RM500 per acre per month, equivalent to RM151,000 monthly or RM1.812 million annually, with no contractual escalation throughout the term. The sublease will begin upon registration with the Sarawak Lands and Surveys Department.
Zecon Renewables signed a power purchase agreement with Syarikat SESCO Bhd on 22 Oct 2025 to design, construct, own, operate and maintain the solar facility. The agreement provides for the sale and delivery of its net electrical output to SESCO for 30 years from the proposed commercial operation date in December 2027. Zecon said the sublease would secure long-term access to a suitable site for the solar facility, which it expects to contribute positively to the group’s future earnings.
According to the independent advice letter accompanying the circular, the group’s wider plans for Kota Petra Green Technology Park include a 300MWac solar farm integrated with a 600MWh battery energy storage system. The park’s master plan also provides for six sites designated for artificial intelligence-driven data centres.
The sublease is a related party transaction, as Zecon group managing director and major shareholder Datuk Zainal Abidin Ahmad holds the remaining 49% interest in Zecon Solar. Interested directors and shareholders will abstain from voting on the proposal. Independent valuer C H Williams Talhar Wong & Yeo assessed the land’s market rental value at RM1.014 million annually, or RM84,500 monthly. The proposed rent exceeds that assessment. However, according to the circular, the valuer’s analysis of the fixed rental stream over the 30-year term produced an estimated average discounted rental equivalent of approximately RM280 per acre per month, consistent with its assessed market rental rate.
Independent adviser Strategic Capital Advisory Sdn Bhd considered the proposal fair and reasonable and not detrimental to non-interested shareholders, recommending that they vote in favour. It nevertheless highlighted that rental obligations would begin before the facility starts commercial operations and generates revenue. Project delays could prolong that period and increase pre-operating costs. The agreement remains subject to conditions including subdivision approval and issuance of a separate title for the site, relevant project approvals, and withdrawal of the Superintendent of Lands and Surveys’ caveat. It also requires consent from the relevant chargee or caveator and/or withdrawal of any caveat they have lodged over the parent lot. Zecon’s tentative timetable targets the agreement becoming unconditional and the sublease being completed in the fourth quarter of 2027.
