KUALA LUMPUR: MUDAJAYA GROUP BHD [] will use cash surplus of RM295 million and its own funds, which may include profits generated by 80%-owned MIPP International Ltd (MIPP) to inject an additional RM631 million in RKM Powergen Private Ltd (RKM).
The RM631 million was the balance of its total investment obligation in RKM of RM871 million.
RKM is a special purpose vehicle set up to undertake a 4 x 360MW coal-based independent power plant (IPP) in Chhattisgarh, India. The RM631 million would be injected over the next two years.
Mudajaya was responding to several queries from Bursa Malaysia Securities on Monday, Aug 30 on how it would finance the additional RM631 million investment in the company said the funds would be sourced from cash surplus of RM295 million as at March 31.
Financing would also be from internally generated funds which may include profits expected to be generated by Mudajaya's 80%-owned MIPP International Ltd (MIPP) via its equipment procurement contracts awarded by RKM and/or fund raising exercises.
Mudajaya said the queries were related to the rumours which have been circulating lately. The response, the company said, was to provide details about the investment in the Indian IPP and the equipment procurement contracts.
Bursa Securities had also queried the company over the relationships and transactions between Mudajaya, its unit Mudajaya Corp Bhd CB, RKM, MIPP International Ltd (MIPP) and Enerk International Holdings Ltd.
In its response, Mudajaya said MCB had earlier agreed with RK Powergen Private Ltd (RK Powergen) to subscribe as shareholders in the share capital of RKM.
'MCB has committed to invest a total sum of approximately RM871 million for a 26% stake in RKM. RK Powergen, the other shareholder in RKM, holds 74% of the shareholding in RKM and shall subscribe for an amount of RM273 million in RKM,' it said.
Mudajaya said MIPP was awarded the equipment procurement contracts to supply the plant and equipment for the IPP project amounting to about RM3.4 billion by RKM.
The balance 20% shareholding of MIPP is held by Enerk International Holdings Ltd, which provides engineering services and support to MIPP.
Mudajaya also said the net profits of MIPP consolidated in Mudajaya's audited accounts for the years ended Dec 31, 2007, 2008 and 2009 were RM11.3 million, RM32.8 million and RM51.3 million respectively.
'Another RM33.5 million have been recognised as profits by MIPP but treated as deferred income of Mudajaya as at Dec 31, 2009,' it said.
On the utilisation of the cash received by MIPP from those transactions with RKM, Mudajaya said'' as at Dec 31, 2009, MIPP had received about RM294 million (US$88.9 million) from RKM for the equipment procurement contracts out of total billing of RM655 million (US$189 million).
Mudajaya said part of these funds amounting to about RM61.7 million (US$18.7 million) and approximately RM75.2 million (US$22.8 million) had been used to pay to suppliers and sub-contractors respectively.
In addition, surplus funds amounting to about RM148 million (US$44.9 million) were advanced by MIPP to MCB which in turn were utilised to pay for its investment obligation in RKM. The inter-company advances are part of the company's treasury management.
Asked about Mudajaya's sources of funding for its investment in RKM of RM240 million as at Dec 31, 2009 and how much of it was funded from MIPP, it said MCB had invested an amount of RM240 million in RKM as at Dec 31, 2009.
'The sources of funding for this investment were internally-generated funds, both from local and overseas projects, as well as from shareholders' funds. Internally-generated funds which include the inter-company balances from MIPP amounting to RM148 million, were utilised to avoid foreign exchange losses as well as to minimise remittance costs out of Malaysia, as part of the Company's treasury management.
'MCB had net cash and bank balances of RM295 million as at 31 March 2010. The company had raised cash from the private placements of Mudajaya shares in 2007 and 2010 amounting to RM56 million and RM177 million respectively,' it said.
The RM631 million was the balance of its total investment obligation in RKM of RM871 million.
RKM is a special purpose vehicle set up to undertake a 4 x 360MW coal-based independent power plant (IPP) in Chhattisgarh, India. The RM631 million would be injected over the next two years.
Mudajaya was responding to several queries from Bursa Malaysia Securities on Monday, Aug 30 on how it would finance the additional RM631 million investment in the company said the funds would be sourced from cash surplus of RM295 million as at March 31.
Financing would also be from internally generated funds which may include profits expected to be generated by Mudajaya's 80%-owned MIPP International Ltd (MIPP) via its equipment procurement contracts awarded by RKM and/or fund raising exercises.
Mudajaya said the queries were related to the rumours which have been circulating lately. The response, the company said, was to provide details about the investment in the Indian IPP and the equipment procurement contracts.
Bursa Securities had also queried the company over the relationships and transactions between Mudajaya, its unit Mudajaya Corp Bhd CB, RKM, MIPP International Ltd (MIPP) and Enerk International Holdings Ltd.
In its response, Mudajaya said MCB had earlier agreed with RK Powergen Private Ltd (RK Powergen) to subscribe as shareholders in the share capital of RKM.
'MCB has committed to invest a total sum of approximately RM871 million for a 26% stake in RKM. RK Powergen, the other shareholder in RKM, holds 74% of the shareholding in RKM and shall subscribe for an amount of RM273 million in RKM,' it said.
Mudajaya said MIPP was awarded the equipment procurement contracts to supply the plant and equipment for the IPP project amounting to about RM3.4 billion by RKM.
The balance 20% shareholding of MIPP is held by Enerk International Holdings Ltd, which provides engineering services and support to MIPP.
Mudajaya also said the net profits of MIPP consolidated in Mudajaya's audited accounts for the years ended Dec 31, 2007, 2008 and 2009 were RM11.3 million, RM32.8 million and RM51.3 million respectively.
'Another RM33.5 million have been recognised as profits by MIPP but treated as deferred income of Mudajaya as at Dec 31, 2009,' it said.
On the utilisation of the cash received by MIPP from those transactions with RKM, Mudajaya said'' as at Dec 31, 2009, MIPP had received about RM294 million (US$88.9 million) from RKM for the equipment procurement contracts out of total billing of RM655 million (US$189 million).
Mudajaya said part of these funds amounting to about RM61.7 million (US$18.7 million) and approximately RM75.2 million (US$22.8 million) had been used to pay to suppliers and sub-contractors respectively.
In addition, surplus funds amounting to about RM148 million (US$44.9 million) were advanced by MIPP to MCB which in turn were utilised to pay for its investment obligation in RKM. The inter-company advances are part of the company's treasury management.
Asked about Mudajaya's sources of funding for its investment in RKM of RM240 million as at Dec 31, 2009 and how much of it was funded from MIPP, it said MCB had invested an amount of RM240 million in RKM as at Dec 31, 2009.
'The sources of funding for this investment were internally-generated funds, both from local and overseas projects, as well as from shareholders' funds. Internally-generated funds which include the inter-company balances from MIPP amounting to RM148 million, were utilised to avoid foreign exchange losses as well as to minimise remittance costs out of Malaysia, as part of the Company's treasury management.
'MCB had net cash and bank balances of RM295 million as at 31 March 2010. The company had raised cash from the private placements of Mudajaya shares in 2007 and 2010 amounting to RM56 million and RM177 million respectively,' it said.
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