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KUALA LUMPUR: Mega First Corp Bhd
’s (MFCB) 51% owned subsidiary, Serudong Power Sdn Bhd, has been given a “partial award” by the Kuala Lumpur Regional Centre for Arbitration Rules declaring that Sabah Electricity Sdn Bhd (SESB) must pay Serudong Power RM7.75mil in relation to shortfall in energy and capacity payments between Nov 15, 2007, and Dec 31, 2015.
MFCB, which is involved in the power generation, limestone product manufacture and property development, told Bursa Malaysia on Monday that the payment (inclusive of goods and services tax) must be made within 30 days of receiving invoices for this amount from Serudong Power, without prejudice to its claims in the arbitration.
Serudong Power, which owns an electricity generating facility in Tawau, seeks to recover “outstanding capacity and energy payments” totalling RM18.66mil due to the adjustment of the fixed operating rate (FOR) and variable operating rate (VOR) for the period from December 2000 to September 2013, together with interests thereon at 1.5% above the base lending rate as provided for in the power purchase agreemebt dated April 13, 1995.
MFCB said any payment made in accordance with the terms of the partial award may be taken into account by the arbitral tribunal in making its final award and in determining the issue and amount of costs and/or interest (if any) in the arbitration.
It added that the partial award would not have a material impact on the earnings and the net assets of MFCB for the financial year ending Dec 31, 2016.
SESB is 80% owned by Tenaga Nasional Bhd and 20% by the Sabah state government.
MFCB shares fell 1 sen to close at RM1.77 on Monday.
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