PETALING JAYA: PKR today demanded an explanation on Putrajaya’s alleged move to purchase two independent power producers (IPPs), Tanjung Energy Holdings Sdn Bhd and Mastika Lagenda Sdn Bhd, at a high price.
The two firms are owned by Tanjung Energy Holdings Sdn Bhd and Mastika Lagenda Sdn Bhd, owned by Ananda Krishnan and Genting Bhd respectively. Both are said to have connections with the government.
The party’s communication director Nik Nazmi Nik Ahmad said the deal had resulted in Ananda and Genting walking away with a profit of RM1.9 billion when it was paid RM8.5 billion for the Tanjong deal in March, and another RM2.55 billion for the 75% stake owned by Genting Sangyen in Mastika Lagenda last month.
The deal was made through 1Malaysia Development Bhd, a fund set up by Prime Minister Najib Tun Razak himself.
“Tanjong’s power business contributed about 75% of the group’s revenue and profits. One thus could say that it made up to RM6.6 billion of the takeover price by Ananda. Now, by flipping the shares to 1MDB, Ananda has made a profit of RM1.9 billion,” Nik Nazmi told reporters here.
Tanjong PLC was taken private by Ananda in September 2010 for RM8.8 billion for the entire group at RM21.80 per share.
Meanwhile Genting had announced a projected net gain of about RM1.9 billion from selling their shares to 1MDB.
“This is highly generous, especially considering the profits made by Genting since the power plant became operational in 1995,” he said.
More lopsided deals?
Mastika, on the other hand, has a shareholders fund of RM422 million, meaning the RM2.5 billion paid by 1MDB resulted in a price-book ratio of about 6 times, said the Seri Setia assemblyman.
“This is above the average price-book ratios of power stocks in the region. In fact, it would actually be cheaper to build a brand new plant of the same size than to buy Genting’s 17-year-old one”.
Nik Nazmi said the valuation of the IPPs was highly dubious given first generation concessions for the IPPs will end in 2016 and 2017 and the government saying that a more competitive deal will replace the existing ones. The current contracts have been described as lopsided.
“Thus any generous valuation for the IPPs does not make sense unless, contrary to the Energy Commission’s statement, there is to be a repeat of the lopsided IPP agreements of the past, at the expense of Petronas, Tenaga Nasional Bhd and the taxpayers.”
Nik Nazmi also questioned why 1MDB had only chosen to purchase Genting’s stake and not those belonging to the Selangor development board PKNS which owns 25% of Genting Sanyen, a move that could have benefited Selangor voters.
Source: FreeMalaysiaToday
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