PETALING JAYA: Tadmax Resources Bhd is disposing of its 35% stake in a power plant on Pulau Indah, Selangor for RM58.45 million cash.
The group told Bursa Malaysia that it had inked an agreement to sell the stake in wholly owned subsidiary Pulau Indah Power Plant Sdn Bhd (PIPP) to Worldwide Holdings Bhd.
PIPP is the special purpose vehicle undertaking the development of the combined-cycle gas turbine power plant with capacity of 1,200MW.
Worldwide is a Selangor state-link company engaged in property, environmental management services, investment holding and medical device manufacturing.
“The disposal is in line with the heads of agreement executed on Sept 14, 2018 with Worldwide and Korea Electric Power Corp (Kepco) which has also been endorsed by the Energy Commission,” Tadmax said.
The exercise is expected to be completed by the first half of 2020.
In a separate filing, Tadmax also announced that PIPP today executed an engineering, procurement, construction and commissioning (EPCC) contract with a joint venture comprising three entities, namely Korea’s Posco Engineering & Construction Co Ltd, Japan’s Mitsubishi Corp and PEC Powercon Sdn Bhd.
“The EPCC contract value forms part of the project’s total cost expected at RM3.3 billion. The project will be funded by a comprehensive fund raising exercise which will include proposed issuance of sukuk along with other banking facilities,“ it noted.
However, Tadmax said the EPCC contract will not contribute to its near-term profitability as it takes four years before commercial operation commences. Construction of the project is expected to be in the first quarter of 2021.