KUALA LUMPUR: Malakoff Corp Bhd‚Äôs move to buy Hicom Power Sdn Bhd for RM575 million will be funded primarily by a sukuk issuance.
This is seen as a move to strengthen the MMC Corp Bhd‚Äôs energy utilities subsidiary before its initial public offering (IPO) in the second-quarter of next year.
The acquisition of Hicom Power, an operation and maintenance company for power plants, will be funded by issue of sukuk worth RM460 million while the rest will be paid through internally generated funds.
The acquisition will provide optimisation of resources in operation, efficient cost allocation on operation and maintenance of the facilities at the Tanjung Bin Plant, MMC group managing director Hasni Harun told reporters last Friday after the company‚Äôs extraordinary general meeting.
It will also facilitate speedier decision making for Malakoff and provide immediate profit contribution to the MMC group without any additional risk, he added.
MMC is a utilities and infrastructure group. Its subsidiary Malakoff is an independent power producer. When asked about the amount of money the company is aiming to raise from the IPO, Hasni said the company would first go into a book building process and it was too early to talk about the amount.
The company has already appointed advisors for the road shows before the IPO, he added.
‚ÄúSome 80% of the proceeds will be used to pay off the debts of Malakoff and the [remaining] 20% will be ploughed back into the company for working capital,‚ÄĚ he said.