Penang Port Butterworth wharves
KUALA LUMPUR: MMC Corp Bhd’s unit MMC Port Holdings Sdn Bhd is acquiring the remaining 51% equity interest in the operator of Penang Port (pic) for RM220mil in cash.
In a statement to Bursa Malaysia, the utilities and infrastructure group said MMC Port had entered into a conditional agreement with Seaport Terminal (Johore) Sdn Bhd to acquire the remaining 37.46 million shares in Penang Port Sdn Bhd (PPSB).
The proposed deal would give MMC full control of PPSB, allowing it to determine the future strategic direction of the country's oldest port.
“This is in line with the initiative of the MMC group to make further strategic investments in one of its core businesses i.e. ports and logistics division, to strengthen the group’s financial performance and position,” the company said.
MMC said the proposed acquisition presented an opportunity for it to consolidate PPSB’s earnings in full, thus contributing positively to the group’s future earnings.
This proposal followed a conditional agreement inked by MMC Port to acquire 49% equity interest in PPSB from STJSB for RM200mil in cash.
The conditions precedent under the latest sale and purchase agreement are to be fulfilled within six months. The period, however, may be extended on mutual agreement of both parties.
MMC said the purchase would be funded via a combination of internally generated funds and/or bank borrowings, the proportion of which would be determined later.
The proposed deal is a related party transaction, as MMC Corp is 51.76% owned by STJSB.
MMC currently operates three major ports in Peninsular Malaysia - Port of Tanjung Pelepas and Johor Port in Johor, and Northport in Port Klang.
The company is also in the process of acquiring 70% equity interest in KMB Seaport Sdn Bhd, which holds a port operating licence to operate Tanjung Bruas Port in Malacca, for RM21mil in cash.
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