Mega First's share price fall 0.57% as PPA expiry looms

PETALING JAYA: Mega First Corp Bhd’s (MFCB) share price fell 0.57% this morning on news that it may stop supplying energy from its Sabah plant to Sabah Electricity Sdn Bhd.
At 11.11am, its share price fell 2 sen or 0.57% to RM3.48 with a total of 104,900 shares traded. The group’s share price gained three sen to RM3.50 yesterday, with 61,300 shares traded.
MFCB told Bursa Malaysia yesterday that the power purchase agreement (PPA), which will expire on Dec 2, 2017, has yet to be renewed.
Although the Energy Commission has proposed new commercial terms for the PPA’s extension, it is subject to the approvals of the Minister of Energy, Green Technology and Water and Sabah Electricity’s board, and the execution of a new PPA between Sabah Electricity and Serudong Power Sdn Bhd, MFCB’s 51% owned subsidiary.
“While the MFCB board remains optimistic the PPA will be extended, the aforesaid approvals and the subsequent extension agreement are unlikely to be obtained and inked respectively before the expiry date of the existing PPA,” MFCB said.
In the absence of any eleventh hour interim arrangement with Sabah Electricity, Serudong Power will have to stop supplying energy on Dec 2, 2017 until such time the PPA extension is executed. This would adversely affect earnings contribution from Serudong Power in the final quarter.