KUALA LUMPUR: Tenaga Nasional Bhd (TNB) has completed its RM46.98 million acquisition of a 70% stake in Jimah East Power Sdn Bhd (JEP) from debt-laden state-owned strategic investment fund 1Malaysia Development Bhd (1MDB).
In a filing with Bursa Malaysia yesterday, TNB said all the conditions precedent in the share sale and purchase agreement (SSPA) with 1MDB for the stake acquisition have been “fully satisfied and complied with”. As such, the acquisition has been completed and JEP is now a subsidiary of TNB.
Earlier this month, TNB announced it had signed the SSPA with 1MDB for the acquisition of the latter's 70% stake in JEP.
JEP is a special purpose vehicle set up to develop the 2,000mw coal-fired power plant in Jimah, Negeri Sembilan, known as Project 3B, which is estimated to cost RM11.7 billion. Japan’s Mitsui & Co Ltd owns the remaining 30% equity interest in JEP.
It was previously reported that TNB’s stake purchase would increase its electricity generation market share to 57.7% from 53.3% by 2020.
Its share price tumbled to an eight-month low of RM12.50 in mid-June — the lowest since Oct 10 last year — after it was reported that the Cabinet had approved its planned takeover, on worries that the move could be a bailout for 1MDB.
Subsequently, TNB chief executive officer Datuk Azman Mohd issued a statement saying that the move was not a bailout, and that the project was expected to have a positive impact on the earnings of TNB.
TNB (fundamental: 1.3; valuation: 1.8) closed down four sen at RM12.56 yesterday, with a market capitalisation of RM70.9 billion.
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This article first appeared in The Edge Financial Daily, on July 10, 2015.