25 September, 2002 – Malaysian investment-holding company Tanjong PLC plans to take its power-generating unit Powertek Bhd. private.
Tanjong plans to invest further in power generation and can easily fund the general offer for the remaining 16 per cent shares it doesn’t already own in Powertek with cash, say analysts.
The construction of a new power plant in Teluk Gong, Melaka state, by Powertek’s 100 per cent-owned Panglima Power Sdn. Bhd. unit is already having the desired effect on earnings. Tanjong raised its total holdings in Powertek to 84 per cent in 1998.
“Power generation recorded a higher turnover of 463.4m ringgit ($121.9m) (for the fiscal first half ended July 31) against MYR276.2m for the corresponding period with the commencement of the commercial operations of Panglima (in Teluk Gong),” the company said in its earnings statement.
Panglima Power’s Teluk Gong plant kicked off its first phase when its two gas-powered turbines began operating February and March. Phase two of the project – involving conversion of the turbines into combined cycle gas turbines – is now underway and scheduled to finish by March.
With 84 per cent of Powertek already in its control, Tanjong’s offer to buy the rest of the former’s shares at MYR8.50 apiece, though 89 per cent higher than when it made a mandatory general offer for Powertek at MYR4.50 in 1998, still isn’t expected to strap the group’s finances.