Spe­cial pur­pose ve­hi­cle de­vel­op­ing 2x720MW power plant in Pasir Gu­dang, Jo­hor

New Straits Times - - Business -


KUALA LUMPUR zari­naz@me­di­

TE­NAGA Na­sional Bhd (TNB) is buy­ing a 51 per cent stake in spe­cial pur­pose ve­hi­cle (SPV) South­ern Power Gen­er­a­tion Sdn Bhd (SPG) for RM51 con­sid­er­a­tion from SIPP En­ergy Sdn Bhd.

SPG is de­vel­op­ing a 2x720 megawatt com­bined-cy­cle gas tur­bine power plant in Pasir Gu­dang, Jo­hor.

Prior to the ac­qui­si­tion, SIPP En­ergy owned 100 per cent of SPG and upon com­ple­tion of the deal, the lat­ter will be­come a TNB sub­sidiary.

The util­ity yes­ter­day signed a share sale and pur­chase agree­ment with SIPP En­ergy and a share­hold­ers’ agree­ment with SPG for the stake ac­qui­si­tion.

The con­struc­tion of the power plant is es­ti­mated to cost RM4.7 bil­lion and will be fi­nanced through a com­bi­na­tion of project fi­nance and eq­uity.

The plant is ex­pected to achieve its sched­uled com­mer­cial op­er­a­tion date on July 1 2020.

The project would en­hance TNB’s gen­er­a­tion ca­pac­ity and have a pos­i­tive im­pact on its earn­ings, adding long-term value for its share­hold­ers, said TNB in a fil­ing with Bursa Malaysia yes­ter­day.

The ac­qui­si­tion would en­hance the cer­tainty of the power project com­ple­tion, in view of TNB’s tech­ni­cal ex­per­tise and fi­nan­cial strength, it added.

TNB had signed a 21-year power pur­chase agree­ment with SPG for the plant in Septem­ber last year.

“It will in­crease TNB’s gen­er­a­tion mar­ket share and ef­fi­ciency of our gen­er­a­tion as­set port­fo­lio,” it said.

The power plant is strate­gi­cally lo­cated in the Pasir Gu­dang In­dus­trial Zone, which re­in­forces the se­cu­rity of sup­ply in Penin­su­lar Malaysia, par­tic­u­larly to the south­ern re­gion.

“TNB, to­gether with ap­pointed ad­vis­ers, has car­ried out a com­pre­hen­sive due dili­gence and risk as­sess­ment on the ac­qui­si­tion of the project,” said the util­ity gi­ant.

The trans­ac­tion will not have any ma­te­rial ef­fect on TNB’s con­sol­i­dated net as­sets per share.

The ef­fects on TNB’s fu­ture earn­ings and earn­ings per share will only be de­ter­mined upon com­ple­tion of the project.

“Any debt to be raised will in­crease TNB’s con­sol­i­dated gear­ing, the quan­tum of which is de­pen­dent on the amount bor­rowed. The ac­qui­si­tion, how­ever, is not ex­pected to have a ma­te­rial ef­fect on TNB’s gear­ing po­si­tion,” it added.

TNB’s shares closed two sen, or 0.14 per cent, higher yes­ter­day at RM13.94, giving it a mar­ket cap­i­tal­i­sa­tion of RM78.89 bil­lion.

The Pasir Gu­dang power plant will en­hance TNB’s gen­er­a­tion ca­pac­ity.

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