In an announcement last Friday, Seaport will sell a 50.1 per cent stake in Pelabuhan Tanjung Pelepas (PTP) to MMC for 338 million new MMC shares valued at RM3 each that represents a 28.8 per cent in the mining company.

Seaport holds 70 per cent of PTP coming into the deal.

Permodalan Nasional Bhd Group’s 44 per cent interest in MMC will be diluted to 31.3 per cent after the sale, but it will remain the single largest shareholder.

Under the agreement signed last week, Seaport also sold 50.1 per cent of the obligations of the company with respect to all the existing and future issues of its reedemable convertible subordinated loan to MMC.

In this RM1.9 billion worth agreement, MMC will pay RM1.646 billion for the equity interest in PTP and RM254 million for the obligation purchased from Seaport, of which Seaport will receive payment of RM884 million in cash and the balance RM1.016 billion to be satisfied by the issuance of new MMC shares at RM3 per share.

Meanwhile, the existing minority public share-holders’ shareholding in MMC will be diluted from 36.1 per cent to 25.7 per cent in the enlarged group, although long-term benefits arising from the acquisition are expected.

According to a statement released to the Kuala Lumpur Stock Exchange, the deal represents a significant business undertaking to be injected into MMC, as a further extension in enhancing group synergies following the reduction in the group’s mining activities.

“PTP, as an investment group, will provide a catalyst to increase shareholder value by increasing attractiveness to investors, both local and and foreign,” the company directors said.

The acquisition is expected to be financed by funds to be raised from the capital market and/or internally-generated funds.

“PTP has good petential for growth, being a 60 plus 30-year concessionaire of the port, leveraged with its close proximity to major shipping routes, international standards, facilities and technology.

“Furthermore, with the recent equity participation by Maersk, it has transferred its transhipment operations from Port of Singapore to PTP.

“The relocation will see PTP becoming one of the major transhipment hub port operations within Maersk’s global network, added with the technical and management expertise to further add value to the operations of PTP,” MMC said in a statement.

Presently, Maersk holds a 30 per cent stake in PTP.

The agreement, however, is subject to approvals from certain authorities.

Upon completion of the proposed PTP acquisition, the issued and paid-up share capital of MMC will be increased from 836.1 million to 1174.8 million shares of RM0.10 each.

MMC’s net tangible assets per share will also be reduced from RM1.97 to RM0.84 as a result of the goodwill on consolidation.

No material effect on the earnings of MMC is expected for the financial year ending January 31 2001.