Malakoff secures US$90m loan to buy stake in Bahrain firm

KUALA LUMPUR: Malakoff Corp Bhd, a subsidiary of MMC Corp Bhd has secured a US$90 million (RM277 million) financing facility to partly finance its proposed acquisition of an indirect 40 per cent stake in Bahrain's largest independent power generation and water desalination plant, Hidd Power Co (HPC).

Source From (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/maximho/Article/
Published: 15 May 2012

The company yesterday signed the financing facility deal with Export-Import Bank of Malaysia Bhd (Exim Bank) and Japan's Mizuho Corporate Bank.

Malakoff chief executive officer Zainal Abidin Jalil said the facility comes into two tranches of US$45 million each (RM135 million) and a tenure of five years.

"For us (Malakoff), this is the first time we secured such financing facility from Exim Bank, while Mizuho had been as our lender previously.

"It's a start for Exim Bank. We can actually do things together for our global expansion," he told reporters after the signing of the loan facility agreement, here.

Zainal Abidin said the synergies developed from the strategic collaboration with the various parties in Malaysia and Bahrain will further strengthen the Malakoff's position as a leading player in the Middle East and North Africa region.

"The company has won and implemented projects in Saudia Arabia and Algeria. The move to expand Malakoff's presence into Bahrain will further solidify its position as a leading independent water and power producer regionally," he said.

HPC is the owner and operator of a build, own and operate power generation and water desalination plant in Bahrain with a total capacity of 929MW of power and 90 million imperial gallons a day of water desalination.

The facility supplies Bahrain with about 39 per cent and 62 per cent of current power and water supply, respectively.

Malakoff is buying a 40 per cent indirect interest in HPC through the acquisition of IP Middle East Holding Company from International Power Holdings Ltd.

Upon the completion of the acquisition, Malakoff International Ltd, a subsidiary of Malakoff Corp will control 40 per cent interest in HPC, while IPR-GDF Suez and Sumitomo Corp will hold 30 per cent stake each.

Moving forward, Zainal Abidin said Malakoff is exploring other growth opportunities, especially in the fast growing Southeast Asian markets, besides the Middle East.

"Today's acquisition marks a further step in Malakoff's expansion as we power ahead with our plans to become Malaysia's multinational water and power company," he said.

Malakoff is Malaysia's largest independent power producer with a net generating capacity of 5,020MW from its six power stations. The company recently won the bid to expand its Tanjong Bin coal-fired power plant by another 1,000MW.

"We are also looking at opportunities beyond Malaysian shores like in Pakistan. But it is still at preliminary studies or early stage. We are also in the midst of organising a bid for a water project in Oman," he said.

Asked on Malakoff's proposed re-relisting on Bursa Malaysia, Zainal Abidin said the company will appoint advisers for the initial public offering, slated by early next year.