ACQUISITION OF 51% EQUITY INTEREST IN SOUTHERN POWER GENERATION SDN. BHD.

Transcription

1 TENAGA NASIONAL BERHAD ACQUISITION OF 51% EQUITY INTEREST IN SOUTHERN POWER GENERATION SDN. BHD. 1. INTRODUCTION Tenaga Nasional Berhad ( TNB ) wishes to announce that it has today, entered into a Share Sale and Purchase Agreement ( SSPA ) with SIPP Energy Sdn. Bhd. ( SIPP Energy ) and a Shareholders Agreement ( SHA ) with SIPP Energy and Southern Power Generation Sdn. Bhd. ( SPG ) for the acquisition of a 51% shareholding in SPG ( the Acquisition ) for a total consideration of RM51.00 ( Acquisition Consideration ). SPG was incorporated on 12 August 2016 as the special purpose vehicle company for the development of 2x720MW Combined Cycle Gas Turbine Power Plant in Pasir Gudang, Johor ( the Project ). Prior to the Acquisition, SIPP Energy owned 100% equity in SPG. Upon completion of the Acquisition, SPG will become a subsidiary of TNB. The Project is expected to achieve its Scheduled Commercial Operation Date ( SCOD ) on 1 July The Project will enhance TNB s generation capacity and will give a positive impact on TNB s earnings, and in return it will add long-term value for TNB s shareholders. 2. DETAILS OF THE ACQUISITION Basis of Determining the Acquisition Consideration and Mode of Satisfaction The Acquisition Consideration was derived based on the RM issued share capital in SPG. TNB will utilise its internal funds to pay the Acquisition Consideration. Salient Terms and Conditions of the SSPA TNB acquires 51% of the entire shareholding in SPG from SIPP Energy for the Acquisition Consideration. The Acquisition Consideration shall be paid by TNB to SIPP Energy upon satisfaction of all the conditions precedent to the SSPA. SIPP Energy has provided customary representations and warranties in relation to financial and business affairs of SPG. 1

2 (iv) All key decisions relating to the business and operations of SPG must be conducted with the consent of TNB pending completion of all the conditions precedent as stipulated in the SSPA. Salient Terms and Conditions of the SHA TNB will become the beneficial owner of 51% shareholding in SPG. The Board composition shall consist of eight (8) Directors whereby five (5) Directors from TNB including the Chairman of the Board and three (3) from SIPP Energy. The SHA may be terminated by notice in writing if a party defaults in material breach of any of its material obligations, undertakings, representations or warranties and in an event of termination defined in the SHA (i.e. winding up, liquidation). 3. RATIONALE AND PROSPECTS FOR THE ACQUISITION (iv) (v) The Project is expected to be earnings accretive to TNB upon its SCOD. Acquisition of the Project will enhance the certainty of the Project completion by bringing TNB s technical expertise and financial strength. The Project will increase TNB s generation market share and efficiency of our generation asset portfolio, which in turn will accelerate our aspiration to become a top 10 global utility by The Project is strategically located in Pasir Gudang Industrial Zone which reinforce the security of supply in Peninsular Malaysia, particularly to the southern region. The Acquisition will create value accretive to TNB s shareholders. 2

3 4. RISK IN RELATION TO THE ACQUISITION TNB together with appointed advisors have carried out a comprehensive due diligence and risk assessment on the Acquisition of the Project. The identified risks associated to the Project have been assessed and mitigated appropriately. 5. FINANCIAL EFFECTS OF THE ACQUISITION Issued Share Capital The Acquisition will not have any effect on the issued share capital of TNB. Substantial Shareholders Shareholdings The Acquisition will not have any effect on the substantial shareholders shareholdings of TNB. Earnings and Earnings Per Share ( EPS ), Net Assets Per Share and Gearing The Acquisition is expected to be earnings accretive to TNB upon the SCOD of the Project. This transaction will not have any material effect on TNB s consolidated net assets per share. The effects on TNB s future earnings and EPS will only be determined upon completion of the project. Estimated Project costs are approximately RM4.7 billion and will be financed through a combination of project finance and equity. Any debt to be raised will increase TNB s consolidated gearing, the quantum of which is dependent on the amount borrowed. The Acquisition however is not expected to have a material effect on TNB s gearing position. 6. APPROVALS REQUIRED The Acquisition has received the approval of Suruhanjaya Tenaga and the Government of Malaysia. This transaction does not require approval by TNB s shareholders, as stipulated in Paragraph 9 of this announcement. 7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED WITH THEM None of the Directors and/or Major Shareholders of TNB and/or persons connected with them has any interest, direct or indirect, in relation to the Acquisition. 3

4 8. DIRECTORS STATEMENT After having considered all aspects of the Acquisition, the Board of Directors of TNB is of the view that the Acquisition is in the best interest of TNB. 9. HIGHEST PERCENTAGE RATIO PURSUANT TO PARAGRAPH 10.02(G) OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD ( MMLR ) The highest percentage ratio applicable for the Acquisition pursuant to paragraph 10.02(g) of the MMLR is 2.11% based on the latest audited consolidated financial statements of TNB for the Financial Year ended 31 August ESTIMATED TIME FRAME FOR COMPLETION OF THE ACQUISITION The Acquisition is expected to be completed upon fulfilment of all conditions precedent in the SSPA within 45 days after the execution of SSPA. 11. INFORMATION ON THE ENTITIES TNB TNB was incorporated in Malaysia on 12 July 1990 as a public company under the name of Tenaga Nasional Berhad, of which was listed on the Main Board (now known as the Main Market) of Bursa Malaysia Securities Berhad on 28 May The issued share capital of TNB as at 28 April 2017 is RM5,652,334, divided into 5,652,334,171 ordinary shares and One (1) Special Rights Redeemable Preference Share which have been fully paid up. TNB is primarily involved in the business of generation, transmission, distribution and sales of electricity. Through its subsidiaries, TNB is involved, among others, in the manufacture of transformers; high voltage switchgears and cables; the provision of consultancy services; the provision of education and training services; the provision of repair and maintenance services and research and development. SIPP Energy SIPP Energy is a private limited company incorporated in Malaysia on 6 March 2012 under the Companies Act, The issued share capital of SIPP Energy 4

5 is RM100, which consists of 100,000 ordinary shares of which have been fully paid-up. SPG SPG is a private limited company incorporated in Malaysia on 12 August 2016 under the Companies Act, The issued share capital of SPG is RM which consists of 100 ordinary shares of which have been fully paid up. SPG was established to be the Special Purpose Vehicle in relation to the Project. This announcement is dated 3 May