KUALA LUMPUR (Aug 21): Five years after taking up a 50% stake in VTTI BV — previously a wholly-owned subsidiary of Swiss-based energy and commodity trading multinational Vitol Group, MISC Bhd is ending the joint venture and selling the stake back to Vitol for US$830 million (RM3.456 billion), cash.

In a statement today, MISC said the group, with its wholly-owned unit MTTI Sdn Bhd, has today entered into an agreement with VIP Terminals Finance BV to dispose of the stake. VIP Terminals Finance is a wholly-owned unit of Vitol Investment Partnership Ltd — an investment vehicle sponsored and managed by the Vitol Group.

Currently, MTTI and Martank BV, a wholly-owned unit of Vitol Holding BV, each holds 50% of VTTI’s issued share capital.

VTTI was founded in 2006 and is a provider of energy storage, worldwide. Its principal activities are owning, operating and managing a network of oil product storage terminals and refineries in five continents and 11 countries, including Tanjung Bin in Johor, and Port Canaveral in Florida, US.

MTTI’s investment in the entire issued and paid-up share capital of VTTI was completed on Sept 7, 2010, at the final cost of investment of US$882.1 million. 

“It has been a great pleasure working with Vitol over the past five years. We wish Vitol the very best in its future endeavours and we are confident that the good relationship we have will continue,” said MISC president cum chief executive officer Yee Yang Chien.

He also said the divestment will enable MISC to unlock the value of its investment in VTTI and to take advantage of future opportunities within MISC’s core business of energy and petroleum-related shipping.

“On completion of the proposed divestment, VTTI will cease to be a joint-venture company of MTTI,” the statement read.

Vitol's president and CEO Ian Taylor said the group has greatly enjoyed working with MISC, which has been an excellent partner over the last five years.

“Looking forward, we are very excited by VTTI’s future potential. The management team, led by Rob [Nijst], has successfully grown and developed the business worldwide. Today, VTTI BV has total gross storage capacity of 54 million barrels, including assets under construction,” he said.

The stake sale is expected to be completed in five business days, according to MISC’s filing on Bursa Malaysia.

MISC intends to utilise the proceeds of the disposal to partially repay borrowings, fund capital expenditure, and to undertake opportunistic acquisitions and investments for future growth — as and when they arise.

MISC (fundamental: 1.2; valuation: 0.8) closed down 1 sen or 0.12% at RM7.99 today, for a market capitalisation of RM35.67 billion.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)