MMC Corp's Power Unit Buys Australian Wind Farm Stake for More Than $120M

Malaysian largest independent power producer Malakoff, a subsidiary of MMC Corp , will spend A$130 million ($120.61 million) to acquire a 50 percent stake in an Australian wind farm from New Zealand's Meridian Energy .

The deal comes with an enterprise value of A$659 million, which includes non-recourse project debt of A$529 million, as Malakoff seeks to build up its asset base ahead of a possible re-listing in the second half of next year.

Following the deal, Malakoff, becomes an equal partner in the Macarthur wind farm with Australian firm AGL Energy Limited which is the operator.

"It will be our first foray into the Australian renewable energy sector with this large scale wind project," said Zainal Abidin Jalil, Chief Executive Officer of Malakoff, in a statement on Friday.

"We are also keen to continue building our asset portfolio that includes water desalination, district cooling and expansion of operation and maintenance business for power generation."

The Macarthur wind farm comes with a long term power purchasing agreement, ensuring stable income for Malakoff regardless of wind resources and future market prices, the firm said.

The Macarthur wind farm, comprising of 140 units of Vestas 3 megawatt(MW) V112 turbines, was completed in January 2013 and has been operational since then.

Its 420 MW capacity is sufficient to power more than 220,000 average homes in Victoria, reducing 1.7 million tonnes of greenhouse gases every year that is equivalent of taking more than 420,000 cars off the road.

The wind farm is one of the "positive outcomes of certain growth opportunities" that Malakoff's parent, MMC Corp, had previously cited as a reason for delaying the listing. The power producer's IPO was estimated to fetch $1 billion.

MMC, controlled by tycoon Syed Mokhtar Al-Bukhary, took Malakoff private in a 2006 deal, valuing the company at about $2.6 billion.

Malakoff owns a generation capacity of 5,020 megawatts (MW) in Malaysia, with six power stations that run on gas, oil and coal, according to its 2010 annual report. It also has power plants in Jordan, Algeriaand Saudi Arabia. ($1 = 1.0779 Australian dollars)

Reporting by Niluksi Koswanage (C) Reuters 2013.