TENAGA, SIME, YTL

Tenaga Nasional Bhd (TNB) (TNB MK, Buy, TP: RM9.90) has no intention to sell its stake in Jimah Energy Ventures Holdings Sdn Bhd which controls the coal-fired 1,400 MW Jimah power plant and the concession for its operations and maintenance. “There is no reason why we should sell,” TNB president and CEO Datuk Seri Che Khalib Mohamed Noh said when asked if TNB was open to parties interested in acquiring its stake in Jimah Energy. Che Khalib said it had yet to be notified of such offers. “We have not been notified by Jimah. We are also a shareholder of Jimah. In fact, under the Jimah shareholder agreement, we have pre-emptive right and if they want to sell their stake to another party, they have to seek our consent,” Che Khalib said. (Financial Daily)

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Tenaga Nasional Bhd (TNB) (TNB MK, Buy, TP: RM9.90) has short-circuited hopes for a reduction in power charges,saying it would not be feasible for the Government to cut both electricity prices and subsidies for utilities simultaneously. “Logically, you can’t reduce both subsidies and tariffs at the same time, CEO Datuk Seri Che Khalib
Mohamad Noh said. “I think the revision of gas (prices) in January 2010 by the Government and its impact is more crucial, rather than asking TNB whether we are going to increase the tariffs.” Che Khalib said. He added that any move by the
Government to lower electricity prices, even as natural gas costs rise, would not be feasible. He also said TNB expected electricity demand in the country to grow 3% in its FY10 on the back on an economic recovery. Meanwhile, Che Khalib said TNB was finalising 3 tenders it received for the 2nd phase construction of the Ulu Terengganu hydropower plant and expected to award the contract by February. He said the 3 parties that had submitted their bids were Loh & Loh Corp Bhd, which submitted a joint bid with Sinohydro Corp; Italian company Salini Construction; and Gamuda Bhd (GAM MK, Buy, TP: RM3.42), which also submitted a joint bid with a Chinese company. (BT)

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Sime Darby Bhd (SIME MK, Hold, TP: RM8.10) is sticking to its acquisition price of RM530m for the Teluk Ramunia fabrication yard, despite independent valuation showedthat the assets are worth RM434.69m. Sime Darby said the final consideration price that it had agreed to pay Ramunia Holdings Bhd for the fabrication yard was agreed on Sept 3 on a willingbuyer- willing-seller basis. In September, Sime Darby and Ramunia had agreed on the price consideration for the latter’s shipyard and assets at RM530m, a reduction of RM30m from the RM560m earlier. (Financial Daily)

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YTL Corporation Bhd (YTL MK, Buy, TP: RM8.00) has proposed to issue up to US$400m exchangeable bonds via wholly owned offshore subsidiary YTL SPV to refinance existing borrowings and pursue potential acquisition opportunities locally and abroad. YTL Corp said the up to seven-year guaranteed exchangeable bonds could be exchanged into new ordinary shares of 50 sen each in the group. CIMB Investment Bank Bhd has been appointed principal adviser. The proceeds from the bond issuance would be partly used to refinance its US$300m zero coupon guaranteed exchangeable bonds due in 2012 issued by YTL Corp Finance (Labuan) Ltd on May 15, 2007. YTL Corp said that despite the 2007/2012 bonds having a maturity date in May 2012, the exchangeable bonds have conditions that include a put option which enable bondholders to redeem all or part of the 2007/2012 exchangeable bonds on May 15, 2010.If all the bondholders exercise the put option, YTL Labuan will be required to meet the redemption amount of 108.7% of their principal amount, amounting up to
US$326.1m. The bond issuance exercise is expected to complete by second half of FY2010. (Financial Daily)