Sabah Ports Buying KK Airport

The news received yesterday invite a thought provoking action from Sabahans.

The news excerpts:

MMC Corp Bhd is buying the entire stake in Senai Airport Terminal Services Sdn Bhd (SATS) for RM1.7bil which is RM250mil below the earlier proposed price of RM1.95bil.

MMC said yesterday the RM1.7bil cash deal would be financed via internally generated funds and might include the disposal of some assets. The earlier proposed RM1.95bil would have involved a share issue.

“The new acquisition price of RM1.7bil comprises RM580mil for airport operations and RM1.1 bil for SATS’s 1087.2ha of freehold land slated for development as a logistics city (equivalent to RM9.45 per sq ft currently compared with RM11.39 per sq ft previously),” it said.

“Having considered all factors, the board decided to negotiate for payment in cash,” he said in statement yesterday

The acquisition of SATS would be a strategic fit for MMC as the airport provides the group with a competitive advantage in the transport and logistics businesses, one of MMC’s three core businesses.

Hasni said this acquisition would be earnings accretive and contribute sustainable future earnings for the group.

The deal will make MMC the only company which owns a private airport in the country.

Also, MMC would be venturing in air logistics, in addition to its existing port operations and land-based logistics business.

MMC owns 70% of in Port of Tanjung Pelepas (PTP) and owns the entire stake of Johor Port.

“This acquisition will enable MMC to exploit SATS’s potential in becoming a regional cargo and logistics hub under a free zone flagship. The airport is also well-positioned to benefit from the growth potential of Iskandar Malaysia,” added Hasni.

The news yesterday triggers what i think Sabah or for that matter Sabah Ports should be thinking aloud.

Not until recently have Sabah Members of Parliament made the loudest of noise in Parliament. This piece of news is something that if Sabah were to exert pressure in Parliament in regard to an economic/business issue for the benefit of Sabah, it would most welcomed and supported by the majority of the population.

The issue is if MMC could make such a move why a Sabah based company cannot follow suit. Sabah Ports/Suria Capital Holdings Berhad is well within its capacity to make a foray into Kota Kinabalu Airports. Is there any reason why Sabah cannot do so?

It would be a well received move by the people of Sabah, and also it would also be considered a fantastic move by federal government to heal whatever bad rifts that maybe in the relationship between the two governments. It would definitely be an excellent public relation effort on behalf of the federal government.

Control of Sabah based assets to local companies would make for excellent avenues for further forays by local based companies into the corporate economic activities of the nation.

I would expect it would a big move with huge capital requirement for this to take place. This is where the state govenment may consciously garner the strengths not only from its own coffer but from the various GLC's to ensure that the move can be successfully undertaken.

The move by MMC states enhancing the Iskandar Role. Sabah Development Corridor needs this more.

When else are we to show that we are SABAH BOLEH!

ramli@ramgold.net