KUALA LUMPUR (July 29): Tenaga Nasional Bhd (TNB)’s board has approved the proposed internal revamp, which involves the transfer of its domestic power generation and electricity retail businesses into two new units, GenCo and RetailCo respectively.
TNB said its principal activities after completion of the proposed internal reorganisation, will be the operation of the high voltage national grid and the distribution of electricity to customers (transmission and distribution business), the international power generation business including thermal power generation, conventional and renewable energy generation business, the provision of corporate and shared service functions to GenCo and RetailCo and other companies within the TNB Group.
TNB said the exercise is expected to improve the efficiency, agility and performance of the business segments of the TNB group of companies and promote ownership, entrepreneurship and innovation within the group.
The proposed internal reorganisation was in line with TNB’s strategic transformation plan, Reimagining TNB, and is envisaged to improve the group’s performance and returns to shareholders in the medium to long-term.
TNB said it will enter into a conditional share purchase agreement and a conditional asset purchase agreement with GenCo for the transfer of the assets, liabilities and business undertakings related to TNB’s generation business.
Upon completion of the proposed GenCo transfer, GenCo’s principal activities will be the ownership, management and operation of the domestic power plants, renewable energy generation business, power plant operation and maintenance business and dry bulk terminal operations business.
“For illustrative purposes, the proposed consideration for the GenCo assets & liabilities is approximately RM12.14 billion, based on the net carrying value in the unaudited proforma balance sheet of the generation business as at Dec 31, 2018,” TNB said.
Meanwhile, TNB will also ink a share purchase agreement (SPA) and assets purchase agreement APA with RetailCo for the transfer of assets, liabilities and business undertakings (including shares held in certain subsidiaries) related to TNB’s Retail Business.
Upon completion of the proposed RetailCo transfer, RetailCo’s principal activities will be the sale of electricity to customers, collection of revenues from customers, provision of customer services, operation of call management centres, green energy solution services and beyond the meter solution services.
Maybank Investment Bank has been appointed as principal adviser for the proposed internal reorganisation.
TNB’s share price settled unchanged at RM13.62, giving it a market capitalisation of RM77.46 billion.