IJM sells 40% stake in Kuantan Port to China's Guangxi Beibu for RM334mil

PETALING JAYA: IJM Corp Bhd is selling a 40% stake in Kuantan Port Consortium Sdn Bhd to China’s Guangxi Beibu Gulf International Port Group Co Ltd for RM334.42mil.

The company told Bursa Malaysia yesterday that its unit, Road Builder (M) Holdings Bhd (RBH), was selling a 38% stake to Guangxi Beibu’s unit Beibu Gulf Holding (Hong Kong) Co Ltd (BGH) for RM317.70mil.

IJM also said its unit, Essmarine Terminal Sdn Bhd, was selling a 2% equity interest, or 2.4 million shares, in Kuantan Port Consortium to Guangxi Beibu for RM16.72mil.

It said the expected gains on the disposal at the company level of RBH and Essmarine Terminal were RM285.3mil and RM15.9mil, respectively.

“There is no profit impact at the group level. However, the disposal would increase the reserves positively and enhance the group’s balance sheet,” it said, adding that proceeds from the disposal would be used for port expansion and working capital of the group.

IJM said its partnership with Guangxi Beibu would bring best practices of port management, as its network of clienteles would enhance the capacity utilisation of Kuantan Port, after capacity is increased with the development of a new deepwater terminal.

“In addition, Guangxi would play an active role in attracting foreign direct investment, in particular from China, to invest in the East Coast Corridor, which would contribute positively to the volume of cargo handled by Kuantan Port,” it said.

Guangxi Beibu currently operates four ports – Fangchenggang Port, Qinzhou Port, Tieshan Port and Beihai Port, in southern China.

Kuantan Port is strategically located facing China, which is destined to be the world’s biggest economy and is one of the biggest trading partners of Malaysia today.

At its AGM last month, IJM Corp chief executive officer and managing director Datuk Teh Kean Ming said Kuantan Port would double its capacity to 52 million freight weight tonnes (fwt) per year, with its maritime terminal expected to start the construction of its new RM3bil deepwater terminal by year-end.

In a StarBiz report in July, Teh had said construction was expected to take two to three years to complete.

He said under the East Coast Economic Region master plan, Kuantan Port City had been identified as the integrated industrial and logistics hub for the region.