KUALA LUMPUR (May 13): Port operator Suria Capital Holdings Bhd (KL:SURIA) is planning to formally diversify into the power business after its consortium with Yayasan Sabah investment vehicle, Innoprise Corp Sdn Bhd, was selected by the state’s regulators for a 100MW gas power plant in Kimanis.
The company will seek shareholders’ approval for the proposal as it sees the power business, to kick off with the Kimanis gas power plant targeted for commercial operation in the fourth quarter of 2028, to contribute at least 25% of its net profit, according to a bourse filing on Wednesday.
The diversification into the power business includes power generation, power transmission and distribution networks, it noted.
An extraordinary general meeting will be convened at a date to be announced later.
The plan comes as its consortium with Innoprise Corp, owned by Sabah state government’s Yayasan Sabah, was selected to develop the 100MW gas peaking power plant by the Energy Commission of Sabah via a letter of notification on May 5.
The joint venture (JV) Suria Powergen 1 Sdn Bhd was incorporated as the designated company to develop the project. Suria Capital’s unit SCHB Engineering Services Sdn Bhd owns 70% in the JV while Innoprise Corp’s NRG Consortium (Sabah) Sdn Bhd owns the remainder.
A shareholders' agreement was also inked between SCHB Engineering, NRG Consortium and Suria Powergen 1 on May 12 to regulate their relationship in the JV.
The project is estimated to cost RM938.6 million, Suria Capital noted. Suria Powergen is to borrow RM750 million for the funding while the remainder will be funded via equity contributions of RM132.02 million from SCHB Engineering and RM56.58 million from NRG Consortium.
A 21-year power purchase agreement is to be entered into with Sabah Electricity Sdn Bhd or a single buyer to be identified as directed by the relevant authorities, it noted. The PPA is to be executed no later than Dec 31, 2026.
Suria Capital and Innoprise Corp share a common major shareholder, the Sabah state government.
Suria Capital is 45.4% owned by the state government’s investment arm, Qhazanah Sabah Bhd. Meanwhile, Yayasan Sabah, whose board of trustees is chaired by the Sabah chief minister, owns 97.6% in NRG via Innoprise Corp, Suria Capital noted.
Besides the proposed diversification, the JV with NRG Consortium is also subject to shareholders' approval. An independent adviser will be appointed to advise non-interested shareholders and directors on whether the proposed JV is fair and reasonable.
At the noon break, shares of Suria Capital stood unchanged at RM1.30, valuing the company at RM449.57 million.