Tenaga gets board nod for internal revamp of power generation, retail businesses

KUALA LUMPUR: Tenaga Nasional Bhd's (TNB) board has approved the proposed internal revamp which involves the transfer of its domestic power generation and electricity retail businesses to two new units.

The power giant said on Monday the reorganisation was expected to improve the efficiency, agility and performance of the business segments of the TNB group of companies.

The plan would also promote ownership, entrepreneurship and innovation within the group. 

It said the reorganisation was in line with TNB’s strategic transformation plan, Reimagining TNB, which is envisaged will improve the group’s performance and returns to the shareholders in the medium to long-term.

The corporate exercise will see TNB transfer the generation business to a new unit to be incorporated (GenCo). It will also transfer the electricity retail business to a new unit to be incorporated (RetailCo).

TNB will also ink a conditional share purchase agreement (GenCo SPA) and a conditional asset purchase agreement (GenCo APA) with GenCo for the transfer of the assets, liabilities and business undertakings. 

Upon completion of the proposed GenCo transfer, GenCo’s principal activities will be the ownership, management and operation of the domestic power plants, renewable energy generation business, power plant operation and maintenance business and dry bulk terminal operations business. 

“For illustrative purposes, the proposed consideration for the GenCo assets and liabilities is approximately RM12.14bil based on the net carrying value in the unaudited proforma balance sheet of the Generation Business as at Dec 31, 2018,” it said.

TNB said the reorganisation would see its domestic power generation and electricity retail businesses coming under new holding companies. 

Each business entity shall be under the purview of a separate board and management team. This is in line with its Reimagining TNB objective to prepare it for the upcoming reforms in the electricity supply industry in Malaysia. 

After the corporate exercise, TNB’s principal activities will be the operation of the high voltage national grid and the distribution of electricity to customers, the international power generation business including thermal power generation, conventional and renewable energy generation business, the provision of corporate and/or shared service functions to GenCo and RetailCo and other companies within the TNB Group.