Kuala Lumpur, 7 April 2014 - Sime Darby Berhad (Sime Darby) has agreed to sell its Malaysian power business under Port Dickson Power Berhad (PDP) to Malakoff Corporation Berhad for RM300 million cash following a strategic review of its businesses.
The disposal is in line with the Group’s long term strategy to be a leader in its main businesses of plantations, industrial equipment, motors, property and energy and utilities.
Malakoff, through its subsidiary companies, will acquire the remaining 75 per cent of PDP it does not already own and 100% of the operation and maintenance company, Sime Darby Biofuels Sdn Bhd (SPV) from Sime Darby Energy Sdn Bhd, a wholly-owned unit of Sime Darby. The price takes into account the projected cash flows of PDP and SPV. The deal is expected to be completed by 30 June 2014.
“The power purchase agreement for PDP expires in 2016. Since we are focusing on our five core businesses, the decision was made not to scale up our investments in the power industry. We will use the proceeds to strengthen our existing businesses,” said President and Group Chief Executive Tan Sri Dato’ Seri Mohd Bakke Salleh.
PDP has a total capacity of 440 megawatts (MW) and it is located on a 67-acre site in Tanjung Gemuk, Port Dickson, Negeri Sembilan. The gas-fired power plant operates according to the ‘open cycle gas turbine mode’ and supplies electric power to Tenaga Nasional Berhad for peaking and emergency requirements. The plant supplies electricity to TNB under a 21-year power purchase agreement expiring in January 2016.
“The dynamics of the power industry have changed considerably since Sime Darby first made its investments in the sector. Our decision to exit from this asset reflects an assessment of our abilities to best capitalise on the opportunities in the various sectors in which Sime Darby has interests. Having said that, our trading and engineering operations which are present in Malaysia, Singapore and Thailand are building capabilities to capture emerging opportunities in these markets. Continuous urbanisation and industrialisation are expected to drive demand for engineering products and services,” said Dato' Ir Jauhari Hamidi, Executive Vice President, Non-China Operations, Sime Darby Energy & Utilities.
For further information please contact:
Ahmad Shahriman Johari
Head, External Communications
Group Communications & Corporate Affairs
Sime Darby Berhad
Tel: (603) 2711 0923
Fax: (603) 2698 0645