KUALA LUMPUR (Oct 2): Power producer Malakoff Corp Bhd has received shareholders' nod to acquire a 97.37% stake in waste management company Alam Flora Sdn Bhd as part of its push into the renewable energy sector.

Malakoff is acquiring the stake via wholly-owned unit Tunas Pancar Sdn Bhd for RM944.61 million from Hicom Holdings Bhd, a wholly-owned unit of DRB-Hicom Bhd, via a share sale agreement (SSA) inked on Aug 1. The deal is a related party transaction as the two companies have a common controlling shareholder in Tan Sri Syed Mokhtar Albukhary. Through his flagship MMC Corp Bhd, the tycoon controls 37.7% of Malakoff and holds a 55.92% stake in DRB-Hicom.

“The acquisition offers synergistic opportunities between Malakoff and Alam Flora to develop waste-to-energy (WTE) projects, leveraging on their respective core competencies and experience,” said Malakoff chairman Datuk Hasni Harun in a statement.

Hasni said the acquisition would “hasten Malakoff’s expansion” into environmental-related business and the renewable energy sector, in line with the government's aspiration to increase renewable energy to become 20% of the nation’s energy generation mix by 2025, from 2% currently.

Alam Flora holds a 22-year concession from the government to provide collection and public cleansing management services in Pahang, Kuala Lumpur and Putrajaya from Sept 1, 2011 to Sept 1, 2033.

Aggregated waste generation across the three locations total at least 3,736 tonnes per day, said Malakoff. It has also said previously that additional revenue prospects may also come from the provision of solid waste management services for Kelantan and Terengganu.

“Through Alam Flora’s wholly-owned subsidiary, DRB-Hicom Environmental Services Sdn Bhd (DHES), Malakoff will also be able to hasten its entry into the increasingly important and fast growing non-concession environmental services sector such as in the provision of integrated solid waste management services, recycling and integrated facility management services,” it added.

DHES currently operates eight landfills, one transfer station, one leachate treatment plant and two incinerator plans. The SSA between DRB-Hicom and Malakoff is conditional upon approval by shareholders in the two firms, among others.

Pending necessary approvals, Malakoff said the acquisition is expected to be completed in six months from the date of the SSA.

Shares of Malakoff rose half a sen or 0.57% to close at 88 sen apiece, giving the group a market capitalisation of RM4.32 billion.