Tenaga Nasional Bhd (TNB) would have close to RM4.5bil in its coffers by the middle of next year from the sale of its minority stakes in independent power producers (IPPs), and that would be more than adequate to meet the company’s RM1bil debt repayment commitment for the financial year ending Aug 31, 2004.
Meanwhile, the company, along with another local player – believed to be Malakoff Bhd – is part of an international consortium that has been shortlisted for a US$1bil water desalination and power project in Saudi Arabia. The winner of the contract is expected to be announced in the first quarter next year.
TNB chairman Datuk Dr Awang Adek Hussin told a press conference in Kuala Lumpur yesterday the company did not plan to issue any debt instruments to meet its capital expenditure requirements since it had enough cash to finance its RM4bil capital expenditure for 2004 and 2005.
“There is no requirement for us to go to the debt market over the next one to two years,’’ he said after the company's AGM.
TNB's total debts stand at RM30bil currently, but would be reduced by RM1bil to RM29bil next year.
“It is important for us to continue to reduce our debts. With the repayment of RM1bil, our gearing will come down and this augurs well for the company,’’ Awang Adek said.
He added that with the need to go to the debt market removed, the company would be able to “focus on improving our services, reducing costs and improving efficiency’’.
Awang Adek also announced that the board had approved the sale of TNB's stakes of 20% each in Segari Energy Ventures and PD Power. The stake in Segari would be sold to Malakoff and that in PD Power to Sime Darby Bhd, and he expects the deals to be completed by the second quarter next year.
“Part of our continuing policy is to sell off our minority stakes in IPPs. All is being done on a commercial basis; we would not sell if we cannot make money out of the sale,’’ Awang Adek said.
Of the RM4.4bil in proceeds arising from the divestment of TNB's stakes in IPPs, RM3.6bil would come from the sale of its Kapar power plant to Malakoff.
This deal is slated for completion by April as the agreements have been signed.
The remaining RM800mil would come from the sale of TNB's stakes in Genting Sanyen (20% for RM240mil), YTL Power (71 million shares for RM234mil), PD Power and Segari Energy Ventures.
The company expects to complete the disposal of its remaining holding of 31 million shares in YTL Power by the first quarter next year and its stakes in Segari and PD Power by the second quarter.
On TNB's power purchase agreement with Jimah Teknik Sdn Bhd, Awang Adek said he expected it to be concluded by the first quarter 2004. Jimmah is set to build a 1,400 MW coal-fired power plant in Negri Sembilan.
On the bid in Saudi Arabia, Awang Adek said TNB and a local party were part of a consortium that included Saudi Arabian and US partners.
“The consortium has been shortlisted and we are hopeful. TNB has a good name in the Middle East,’’ he said.
Awang Adek said the company was also eyeing some projects in Africa. But any venture abroad would be carefully evaluated. “We will not borrow money to go abroad and we will do it selectively,’’ he said.
He added that TNB's venture in Pakistan via Liberty Power was doing well.
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