Genting Bhd is selling its power generation business to 1Malaysia Development Bhd (1MDB) for RM2.30bil cash consideration as the group seeks to expand and develop its power generation portfolio abroad.
It said on Monday it was selling its entire 97.7 per cent stake in Mastika Lagenda Sdn Bhd, which houses its power assets, to 1MDB.
Its 97.7 per cent owned subsidiary Genting Sayen (Malaysia) Sdn Bhd was also selling its freehold and leasehold industrial land where the power plant is located, measuring 3.21m sq ft in Kuala Langat, Selangor for RM38.8mil
Genting Bhd said Genting Sanyen was one of the first generation independent power producers in Malaysia.
“Although its power purchase agreement (PPA) is due to expire in 2016, the plant is well maintained and can continue to be operated efficiently beyond 2016. Accordingly, Genting Sanyen has submitted the extension proposal to the Energy Commission,” it said.
Genting Sanyen operates the 720MW gas-fired combined cycle power plant in Kuala Langat, Selangor, under a “build, own and operate” basis. The plant started commercial operations in 1995 and is the group’s sole power generation asset in Malaysia.
In a separate statement, 1MDB described the acquisition as a step towards greater efficiency and a more sustainable energy security in the long term, as power availability was critical to maintain investors’ confidence and to support the economic growth of the country.
“Given its unique private-public sector dynamics, 1MDB can create new synergies and catalyse the adoption of innovations in green and sustainable technologies,” it said.