KUCHING: IJM Corporation Bhd (IJM Corp) is set to reap long term benefits from its potential strategic tie-up with Guangxi Beibu Gulf International Port Group Co Ltd (Guangxi) on the back of which the alliance could spur the group’s port business.
To note, IJM Corp announced that it had entered into a memorandum of understanding (MoU) with a strategic investor, Guangxi to dispose 40 per cent of its equity interest in Kuantan Port Consortium Sdn Bhd (Kuantan Port).
According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) in research report yesterday, the preliminary valuation for the 40 per cent disposal of Kuantan Port was RM310 million.
“The proposed disposal will not have any binding effect until both parties entered into a definitive agreement, which will be executed within six months from the date of MoU,” analyst Mohd Iqbal Zainal Abidin said adding that the proposed disposal also required approval from the government.
He said that the group’s latest strategic move was expected as it was part of IJM Corp’s RM3 billion plan to expand its port business.
“According to the management, IJM Corp together with the strategic investor, Guangxi will build a new deep water terminal that will allow vessels up to 200,000 deadweight tonnage to berth.
“The expansion of Kuantan Port is actually one of the Malaysia-China Kuantan Industrial Park (MCKIP) where Guangxi will pour more than RM7 billion directly via joint ventures with Malaysian companies,” Mohd Iqbal explained, noting that other projects under MCKIP included integrated steel plant, an aluminum processing plant and a palm oil refinery.