Hmmm.. Genting's own Financial statements for the year ended 2011 when it still owned the plants showed that this particular Genting Sanyen asset was making RM231million per year. Check under the results for "discontinued operations".
|Genting Group FY 2012 Financial Report - discontinued operations means business sold to 1MDB|
|Page 137 of 1MDB Audited Financial Statement 2014 shows the Genting plants contributed RM159m to 1MDB profits|
(RM159m profit out of revenues of RM352m? IPP seems to have very high margins)
Can Uncle Lim tell me where I can buy an asset for RM400m but makes about RM160m-RM230m per year in profits?
Price-to-Earnings of only about 2X.
What a good deal.
The Genting power plants concessions now extend to 2026 and even when 1MDB bought the plants, the bid to extend were already submitted.
Due to its well-maintained equipment, its location being the closest to the main load center of KL (60KMs) and competitive pricing submitted, it was almost a sure bet to be renewed.
Also, 1MDB bought key parcels of land besides the existing plants and if ever an additional power purchase agreement was tendered out by the Electricity Commission, and expansion or additional plant next to the current plant would have meant that 1MDB would be best placed to offer the best price, fastest time to market and best location to win since all the power cabling and infrastructure is there already.