TANJONG Plc may sell its first bond overseas to fund the purchase of two electricity plants in Egypt.
Tanjong is negotiating to buy the plants with 1,366-megawatt (MW) capacity from Electricite de France, the world’s biggest power producer, by the first quarter of next year, executive director Ralph Marshall said.
“We will be looking at optimising the financing structure, and that does not preclude long-term US dollar borrowings to suit case,” Marshall said in an interview in Kuala Lumpur. A “bond is one option of raising the money. You can also do a syndication, bank financing.”
He declined to comment on the acquisition cost.
The acquisition would be Tanjong’s biggest investment outside Malaysia and will almost double its power generation capacity. Tanjong has three power plants in Malaysia with a combined capacity of 1,490 MW, giving it a 9% share of the market.
The Malaysian plants accounted for 37% of the company’s sales and 75% of its operating profit last year, according to the annual report.
Tanjong has sold RM1.59bil of local-currency bonds since 2002 to finance its local plants.
Paris-based Electricite de France owns two plants in Egypt, which generated annual sales of US$174mil in 2004, it said in regulatory filing to the London and Kuala Lumpur stock exchanges on Tuesday.
Vincent Khoo, head of research at Hwang-DBS Vickers Research in Kuala Lumpur said a Tanjong 10-year dollar-denominated bond would yield about 6%. - Bloomberg