This article first appeared in The Edge Financial Daily on October 30, 2019 - November 5, 2019

KUALA LUMPUR: Malakoff Corp Bhd’s unit is planning to sell its entire 50% participating interest in the Macarthur Wind Farm in Australia, for A$356.85 million (RM1.02 billion) cash, which will give the group a disposal gain of approximately RM546 million.

It is disposing of the stake to Megawatt Financing Pty Ltd and AMPCI Macarthur Wind (T) Pty Ltd — the trustee of AMPCI Macarthur Wind Trust. The stake sale was effected by a conditional share and unit purchase agreement inked yesterday by Malakoff’s indirect wholly owned unit, Skyfirst Power Sdn Bhd.

Malakoff acquired its interest in the wind farm in June 2013 from Three River Holdings No 2 Ltd and Meridian Energy Australia Pty Ltd, wholly owned units of Meridian Energy Ltd, according to a statement from the group yesterday.

The 420mw wind farm is located about 16km east of Macarthur, a town in south-west Victoria, Australia. In operation since January 2013, the facility comprises 140X3mw V112 Vestas wind turbine generators and is the largest wind farm in the southern hemisphere.

Malakoff chief executive officer Datuk Ahmad Fuaad Mohd Kenali said the proposed disposal “provides an opportunity for Malakoff to unlock the value of its investment in the Macarthur Wind Farm”.

“The group will continue to be on the lookout for potential power and water assets within and outside the country,” he added. The estimated gain will immediately help reduce Malakoff’s borrowings, which stood at RM15.2 billion as at Dec 12, 2018, to RM13.37 billion and trim its gearing ratio from 2.36 times to 1.91 times.

The proposed disposal is expected to be completed by the first quarter of 2020.

Malakoff shares closed unchanged at 83 sen yesterday, valuing the company at RM4.06 billion.