Gas Malaysia in joint venture with Sime Darby Offshore Engineering

PETALING JAYA: Gas Malaysia Bhd is teaming up with Sime Darby Offshore Engineering Sdn Bhd (SDOE) to provide electricity, steam, chilled water, hot water, hot air and/or any other utilities via combined heat and power (CHP) system to industries in Malaysia.
The move will see Gas Malaysia diversify from gas distribution to energy business.
In a filing with Bursa Malaysia today, Gas Malaysia said Gas Malaysia Venture 1 Sdn Bhd (GMV1), a wholly-owned subsidiary of Gas Malaysia Ventures Sdn Bhd, which in turn is a wholly-owned subsidiary of Gas Malaysia, had entered into a joint-venture agreement (JVA) with SDOE today.
Under the JVA, GMV1 and SDOE will incorporate a joint-venture (JV) company to pursue and engage in the business; carry out the design, construction, installation, commissioning and operation of CHP at each customer’s premises; and engage in any activity in relation to the objectives and purposes as per terms of the JVA.
“The JV is in line with Gas Malaysia’s overall strategy of maintaining its key position to be an innovative value added energy solution provider,” it said.
GMV1 will hold a 70% stake and SDOE the remaining 30% in the JV company which will have a paid-up capital of RM5 million. The JV company will have at least four directors, of which three will be nominated by GMV1 and one nominated by SDOE.
The commencement of the incorporation of the JV company is conditional upon the negotiation and execution of an energy supply agreement with a potential customer of Gas Malaysia as well as the negotiation and execution of an engineering, procurement, construction and commissioning contract with contractor, within 12 months from the signing of the JVA.
GMV1 will fund its investment in the JV company through a combination of internally generated funds and borrowings. The JVA is conditional upon approval being obtained from regulatory authorities.
Gas Malaysia’s share price fell 0.36% or 1 sen to close at RM2.76 today with a total of 198,600 shares traded, giving it a market capitalisation of RM3.54 billion.