Petronas Gas unit sues Sabah Electricity for RM82.85m

PETALING JAYA: Petronas Gas Bhd’s unit Kimanis Power Sdn Bhd is claiming an estimated RM82.85 million from Sabah Electricity Sdn Bhd in relation to a dispute over a power purchase agreement (PPA) entered in 2012.
It said in a filing with the stock exchange that the claim notice, which was issued on March 24, arose from cost incurred by Kimanis Power due to Sabah Electricity’s delays and/or other breaches associated to the PPA, among others.
The RM82.85 million claim translates into RM49.71 million for Petronas Gas, a 60% shareholder of Kimanis Power.
Petronas Gas noted that the arbitration is part of Kimanis Power’s efforts to protect and preserve its rights and monetary claims in respect of Kimanis Power’s rights and obligations accorded under the PPA.
Subsequent to that, Sabah Electricity had via its letter dated April 25 stated its intention to issue a statement of claim and/or counterclaim against Kimanis Power amounting to about RM124.08 million (of which RM74.45 million would be Petronas Gas’ 60% share in Kimanis Power) being liquidated damages entitled to it pursuant to the terms of the PPA.
Petronas Gas stressed that the arbitration will not have any material impact on its operations and financial position for the current financial year ending Dec 31, 2017.
On another note, Petronas Gas reported a 3.6% rise in net profit to RM463.24 million for the first quarter ended March 31, 2017 compared with RM447.17 million in the previous corresponding period, underpinned by lower tax expense as a result of utilisation of utilities business tax incentive.
Revenue expanded 3.4% from RM1.13 billion to RM1.17 billion for the quarter.
The group has proposed to declare an interim dividend of 15 sen per share for the quarter under review.