Putting a price tag on Edra

comments     Khairie Hisyam     Published     Updated

KINIBIZ When blue chip utilities player Tenaga Nasional Bhd announced it is eyeing 1Malaysia Development Bhd’s (1MDB) power assets on July 15, the market didn’t take it well. The counter, still correcting after an all-time high of RM15.10 per share in January, fell 3 percent to RM12.36 per share the next day and eventually hit nearly a two-year low at RM10.36 per share in late August.

Such was the concern over a potentially bad deal for Tenaga Nasional in the proposed deal - the term ‘bailout’ rolled easily off the tongue given Tenaga Nasional ultimately counts a common shareholder with strapped 1MDB in the Finance Ministry, which wholly owns 1MDB and holds 30 percent in Tenaga Nasional via Khazanah Nasional Bhd.

On the other hand, the power assets held under Edra Global Energy remain sizeable and, on account of its power purchase agreement (PPAs) for those assets, lucrative.

According to its website, Edra owns full or partial stakes in a total of 13 power plants, five of which are in peninsular Malaysia. Collectively, these assets boast 8,776 megawatts (MW) in total generation capacity, of which 3,652MW are in Malaysia, not including its upcoming Track 4B power plant project.

This makes Edra the second-largest power producer in the Malaysian power sector, just ahead of recently relisted Malakoff Corp Bhd.

For Tenaga Nasional, adding Edra’s stable of power assets to its own would be a “strong fit” to its growth strategy, it said in July. “As the country’s largest power producer, no other bidder knows these assets better than Tenaga,” said president and chief executive officer Azman Mohd on Oct 6, adding this makes Tenaga Nasional the “best and most logical” buyer.

For the full story go to KINIBIZ .

Yesterday: 1MDB power assets come full circle

Tomorrow : Foreign ownership issue bogey over Edra sale



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