MMC Corp takes controlling stake in Tg Bruas Port operator

A freight vessel loading shipped goods at Port of Tanjung Pelepas (PTP) in Gelang Patah on Dec 3, 2015.

KUALA LUMPUR: MMC Corp Bhd is taking 70% equity interest in KMB Seaport Sdn Bhd, the operator of Tanjung Bruas Port in Malacca, for RM21mil in cash.

In a filing with Bursa Malaysia, MMC said it had inked a conditional agreement to acquire the ordinary equity interest and 4.99 million irredeemable convertible cumulative preference shares in KMB Seaport from Seaport Management Services Sdn Bhd.

The proposed acquisition is a related-party transaction, as Seaport Management’s holding company Seaport Terminal (Johore) Sdn Bhd is also MMC’s major shareholder (with a 51.76% stake in MMC).

Tanjung Bruas Port, a small terminal with two jetties that can accommodate small to medium-sized vessels, is located at the most central and narrowest part of the Straits of Malacca.
 
In May last year, KMB Seaport Sdn Bhd inked a privatisation agreement with the Federal government and Malacca Port Authority that gave it a 30-year concession to operate the port.

Under its development plan, KMB Seaport intends to expand the port’s capacity as well as modernise the equipment and facilities.

MMC said the proposed acquisition was in line with the initiative of the MMC’s board to make further strategic investment in MMC’s core business, ports and logistics, in order to strengthen the group’s financial position.

The purchase “bodes well for MMC Group’s effort in maintaining its position as a key player in the ports industry in Malaysia,” it added.

The proposed acquisition is expected to be completed in the first half of 2017.