MMC Corporation, a Malaysian utility and infrastructure group, has agreed to acquire a 49 percent stake in the country's oldest port for MYR200 million ($49.6 million; €44.8 million).
Seaport Terminal, the seller, will pocket MYR200 million ($49.6 million; €44.8 million) upon completion of the deal, while retaining a 51 percent stake. Seaport is itself MMC's main owner, holding a 52 percent interest in the business.
Penang Port, located at the northwest tip of the Malaysian peninsula, is the main gateway for shippers in the country's northern states and Thailand's southern provinces. As part of the deal, the port will sell its loss-making ferry service business, according to a regulatory filing. MMC said the acquisition will help the group bolster its core ports and logistics units.
Penang Port is currently going through a revamp in a bid to become more competitive and profitable. The plan involves increasing capex, cutting costs, boosting efficiency and providing additional services for cargo handling.
MMC said the proposed acquisition will be fully funded via internally generated cash and/or bank borrowings. The company's port portfolio already includes Port of Tanjung Pelepas, Johor Port, and Northport in Port Klang. The company also operates a container terminal in Saudi Arabia's Jeddah Islamic Port, through an affiliate.
In addition to port and logistics, MMC invests in energy and utilities as well as engineering and construction. It is the single largest shareholder of Malakoff Corporation, the country’s largest Independent Water and Power Producer.