MMC Corp remains eager to acquire stake in Sabah Ports

The group plans to re-enter negotiation with a newly improved offer

by SHAHEERA AZNAM SHAH

MMC Corp Bhd remains keen to acquire a stake in Sabah Ports Sdn Bhd (SPSB) despite the latter’s parent company having officially declined to pursue a stake sale to the country’s largest port operator.

Sabah state-controlled company Suria Capital Holdings Bhd announced last Friday it was no longer pursuing the proposed acquisition of SPSB by MMC Port Holdings Sdn Bhd, a wholly owned subsidiary of MMC Corp.

MMC Corp group MD Datuk Seri Che Khalib Mohamad Noh said the group plans to re-enter the negotiation with a newly improved offer, but it is up to SPSB to consider the proposal.

“Yes, it has been announced that the deal is off, but we are revising the terms and conditions that have to be met by both parties.

“We figure out that there were some disproportionate terms with the state government that have to be aligned first before we negotiate a new deal,” he told The Malaysian Reserve.

On April 6, Suria Capital told Bursa Malaysia that it has called off the plan to sell a stake in Sabah Port to MMC Corp.

“We wish to confirm that Suria Capital is no longer pursuing the proposed acquisition of Sabah Port by MMC Port.

“Sabah Port will remain a wholly owned subsidiary of Suria Capital,” it said in the statement.

Suria Capital did not detail the reasons behind its decision to abort the proposed stake acquisition.

On Aug 10, 2017, a local business daily reported that Suria Capital confirmed it was in talks for a proposed acquisition by the diversified group which owns the largest port asset in the country.

MMC Corp, through its subsidiary MMC Port, manages five sea ports, namely Pelabuhan Tanjung Pelepas Sdn Bhd, Johor Port Bhd, Northport (M) Bhd, Penang Port Sdn Bhd and Tanjung Bruas Port Sdn Bhd.

On May 11, 2017, MMC Corp received approval from its shareholders to purchase the remaining 51% stake in Penang Port — the latest addition to its port operation.

Collectively, MMC Corp handles an approximate 15.6 million 20-ft equivalent units as registered in 2016.

Meanwhile, Sabah Ports holds a 30-year concession to operate eight ports in Sabah, commencing 2004, namely Sapangar Bay Container Port, Sapangar Bay Oil Terminal, Kota Kinabalu Port, Sandakan Port, Tawau Port, Lahad Datu Port, Kunak Port and Kudat Port.

It handles cargos including container, dry bulk, general cargo and liquid cargo, especially palm oil and petroleum.

The Sabah state government holds a 51% stake in Suria Capital, with the investment arm of the Sabah government, Warisan Harta Sabah Sdn Bhd, controls 45.4% of Suria Capital, Yayasan Sabah Group 3.67%, while the chief minister of Sabah holds the remaining 1.66%.

Acquisition of SPSB would enable MMC Corp to add a key missing component in its port portfolios and a base in East Malaysia amid growing trades in the region. The MMC-Suria Capital talks have not mentioned whether the deal would be a full or partial stake sale.

MMC Corp is expected to list its port business as the company wants to monetise its assets.