KUALA LUMPUR: Tenaga Nasional Bhd
’s (TNB) 51%-owned subsidiary Southern Power Generation Sdn Bhd (SPG) has proposed to issue sukuk of up to RM4bil in nominal value to partially fund its power plant project in Johor.
“The proceeds of the sukuk wakalah shall be utilised to fund up to 80% of the total project costs,” the utility giant told Bursa Malaysia.
SPG, a joint venture between TNB and SIPP Energy Sdn Bhd, plans to operate a 1,440 MW power plant in Pasir Gudang, Johor, costing about RM4.7bil.
The long-delayed project, known also as Track 4A, got back on track after the inking of a 21-year power purchase agreement with TNB in September last year.
SIPP, said to be a private vehicle owned by the Johor Sultan, was first awarded the project in June 2014 as part of a consortium with TNB and YTL Power International Bhd
YTL Power and TNB subsequently left the consortium, but TNB returned to take up a 51% stake in May.
TNB told Bursa Malaysia in May that by acquiring SPG, it would ensure the completion of the power plant project with its expertise and financial strength.
In the latest announcement, TNB said the sukuk would be issued in one lump sum with a tenure of up to 20 years.
It said that based on its consolidated balance sheet ended May 31, 2017, and assuming that the maximum amount of RM4bil nominal value of the sukuk wakalah was issued, its consolidated gearing would increase from 39.8% to 42.3%.