MMC Can Now Sell PTP Stake To Foreign Parties

By Shahriman Johari, [email protected]

The government has allowed MMC Corp Bhd to talk to foreign parties on the proposed sale of its port in Johor, relaxing an earlier stand, sources said.

This would help MMC, a conglomerate controlled by Tan Sri Syed Mokhtar AlBukhary, to raise much needed funds for expansion.

MMC wants to sell about one fifth of Port of Tanjung Pelepas, Malaysia's second largest container port, for about RM1.7 billion.

However, the government limited its options as it barred MMC from dealing with foreigners, viewing the port as a strategic asset, and leaving it to talk to local funds.

"There is no black and white approval but MMC can proceed (and talk to foreigners)," said one source familiar with the developments. If a deal can be struck, it will still have to go back to the government for approval.

In December last year, MMC said that the sale of a minority stake in PTP is in an advanced stage. It now owns 70 per cent of the port while Danish shipping giant Maersk holds the rest.

Interest from foreign companies, which include shipping lines, remain strong and MMC had received about four to five expressions of interest.

One had even offered to buy up to 70 per cent of the port. Large shipping lines like Evergreen Marine Corp have made their interest known while Maersk could not be ruled out due to its "pre-emptive rights" as an existing shareholder. This means that whatever offer MMC makes for its PTP stake to another party, it has to make the same offer to Maersk first.

"Those in the industry, they appreciate the value of business, they see the value in this," the source said.

Nonetheless, MMC is likely to keep control of PTP in line with the government's interest of keeping strategic assets in national hands.

MMC's port business, which also include Johor Port Bhd, is the group's second biggest profit contributor after its power plants.

In the year to December 31 2007, the port division posted an operating profit of some RM418 million, its annual report showed. It did not give a breakdown of how much PTP earned for the yea