KUALA LUMPUR (Feb 8): YTL Power International Bhd is disposing of its entire 33.5% equity interest in Australia’s ElectraNet Pty Ltd for A$1.03 billion (RM3.06 billion), as the group looks to realise gains from the two-decade-old investment.

In a filing with the bourse, the group said the stake sale by its wholly-owned indirect subsidiary YTL Power Investments Ltd (YTLPIL) to Australian Utilities Pty Ltd also includes 3,300 shareholder loan notes, 2,550 preferred loan notes and 26.28 million subsidiary shareholder loan notes issued to YTLPIL.

The sale consideration will be paid in cash and represents a premium of A$767.84 million to the carrying value of the investment in ElectraNet of A$258.16 million, based on YTL Power’s audited accounts for the financial year ended June 30, 2021, the group said.

Upon completion of the disposal, the group will recognise a gain of RM2.21 billion, based on the carrying value of the investment as at June 30, 2021.

ElectraNet operates the high voltage electricity transmission system throughout South Australia state under a 200-year exclusive lease granted by the state government.

YTL Power acquired the 33.5% stake in December 2000 for A$58.5 million (RM122.9 million based on the exchange rate then), which was its first foray offshore, building on its experience as Malaysia’s first independent power producer with its two power stations in Paka, Terengganu, and Pasir Gudang, Johor.

“The proposed disposal represents an opportunity to realise gains from a mature investment, further optimise the balance of assets in its business portfolio, and increase the group’s flexibility to deploy its cash reserves towards viable new businesses that complement its existing assets,” the group said.

It added that the disposal will contribute positively to the value of the group, barring unforeseeable circumstances.

YTL Power intends to use the proceeds raised from the sale for future investments to be identified, as well as for general corporate purposes.

The disposal is expected to be completed by the end of the second quarter of 2022, it said.

YTL Power’s share price rose 0.5 sen or 0.8% to 60 sen on Tuesday (Feb 8), giving it a market capitalisation of RM4.9 billion.