KUALA LUMPUR (Nov 13): Mega First Corp Bhd's 51% indirect unit is planning to sell its power plant in Tawau and all related assets, which will contribute a profit increase of RM9.65 million to Mega First's financial year ending Dec 31, 2019 (FY19).

In a stock exchange filing today, Mega First said its indirectly owned unit, Serudong Power Sdn Bhd, inked an assets sale agreement on Monday with Reliable Power Resources Sdn Bhd for the proposed disposal.

The power plant is being sold as the asset has ceased operations since the expiry of the power purchase agreement between Sabah Electricity Sdn Bhd (SESB) and Serudong on Dec 2, 2017, said Mega First.

The asset sale means a RM16.65 million provision that Serudong made in 2018 to cover all costs associated with the dismantling of the power plant, will no longer be necessary.

This provision will therefore be reversed into Serudong's profit and loss, Mega First said, adding the building and plant assets have also been fully impaired in Serudong's books.

Thus, upon completion of the proposed disposal, Serudong will record a pre-tax gain amounting to RM3 million.

The proposed disposal is expected to boost Mega First's consolidated earnings with an additional RM9.65 million in net profit for FY19, which would translate to an increase of 2.43 sen in earnings per share and an increase in net assets per share of 2.41 sen.

Mega First shares slipped 6 sen to settle at RM4.75 today, which gave the group a market value of RM1.95 billion.