MMC buys 49% of Penang Port for RM200m

PETALING JAYA: MMC Corp Bhd is buying a 49% stake in Penang Port Sdn Bhd (Penang Port) for RM200 million in a related party deal.
In a filing with the stock exchange, MMC said it entered into a conditional share sale and purchase agreement last Friday with Seaport Terminal (Johore) Sdn Bhd for the stake. Seaport Terminal is a major shareholder of MMC.
Penang Port, which was incorporated on Dec 7, 1993, is involved in the operation, maintenance, management and provision of port facilities and other related services. It also maintains, develops, operates and administers a free commercial zone under the Free Zones Act, 1990 and provides warehousing services.
For the financial year ended Dec 31, 2015, Penang Port reported a net profit of RM2.22 million, a huge jump compared with RM311,000 in 2014.
MMC said the acquisition is in line with the company’s initiative to make further strategic investments in one of its core business – ports and logistics.
“It is also expected that the proposed 49% acquisition would contribute positively to the future earnings of the MMC group,” it said in a statement, noting that the acquisition will bode well for the effort to maintain as a key player in the ports industry in Malaysia.
MMC noted that Penang Port is currently undertaking a transformation programme to turn around the port to be more competitive and profitable.
It added that the deal will be financed with internally generated funds and/or bank borrowings.