KUALA LUMPUR: Malakoff Corp Bhd is buying Khazanah Nasional Bhd’s 40 per cent stake in Malaysian Shoaiba Consortium Sdn Bhd for US$70 million, a move that will see larger earnings to the company.
Malakoff’s indirect wholly-owned unit Malakoff Gulf Ltd has entered into a share sale agreement with Khazanah over the acquisition of the entire stake in Desaru Investments (Cayman Isl.) Ltd, which in turn owns 40 per cent in Shoaiba Consortium.
At present, Malakoff Gulf holds the other 40 per cent while Tenaga Nasional Bhd holds the remaining 20 per cent.
Malakoff chief executive officer Datuk Ahmad Fuaad Kenali said the acquisition will provide immediate earnings accretion to the company as well as increase in cashflows, derived from the remaining ten years contract under Shuaibah Water & Electricity Co Ltd’s power and water purchase agreement for Shuaibah 3 Independent Water and Power Plant.
He said this also includes Shuaibah Expansion Project Company’s water purchase agreement for Shuaibah 3 Expansion Independent Water Plant.
“The proposed acquisition will increase and consolidate Malakoff’s total effective generation capacity for power and water to 6,708 MW and 544,375 m3 /day respectively, from the existing 6,600 MW and 420,925 m3 /day respectively, in line with the company’s growth strategy,” Ahmad Fuaad said in a statement.
Shoaiba Consortium holds 50 per cent stake in Saudi-Malaysia Water & Electricity Company Ltd, which in turn holds 60 per cent in Shuaibah Water & Electricity and 60 per cent in Shuaibah Expansion Holding Company.
Shuaibah Expansion holds 97.5 per cent stake in Shuaibah Expansion Project Company (SEPCO).
Saudi-Malaysia Water & Electricity also directly holds one per cent in SEPCO.
Desaru Investments holds 20 per cent stake in Al-Imtiaz Operations & Maintenance Company Ltd (AOMC) while Malakoff, through TJSB International (Shoaiba) Ltd, holds 20 per cent equity stake in AOMC.
Following the acquisition completion, Malakoff’s indirect effective equity interest in Saudi-Malaysia Water & Electricity and AOMC will increase to 40 per cent while MSCSB will become its indirect 80 per cent-owned subsidiary.