MMC Corp Bhd has announced it has reached a conditional agreement to acquire a 49% stake in Penang Port Sdn Bhd (PPSB) (Malasya) from Seaport Terminal (Johore) Sdn Bhd (STJSB), a subsidiary company of Indra Cita Sdn.

The value of the acquisition will be MYR200 million (US$50 million) in cash and STJSB will maintain a 51% stake in PPSB.

Located in the state of Penang, in the north-west of Peninsula Malaysia, Penang Port is the oldest and longest established port in Malaysia. The port serves as the main gateway for shippers in the northern states of Malaysia and also the southern provinces of Thailand.

This acquisition is in line with the MMC’s initiative to make further strategic investments in one of its core businesses, ports and logistics, and to strengthen its financial performance and position. It would help the group maintain its position as a key player in the ports industry in Malaysia as well as to establish its foothold in PPSB.

PPSB is currently undertaking a transformation programme to turn around the port to be more competitive and profitable. This includes reducing operation cost, increasing port efficiency, providing additional services for cargo handling activities and developing continuously the port infrastructure to meet industry demand.

PPSB’s operations are subject to the terms and conditions under the privatization agreement. Among others, the concession is for an approved period (reportedly ending in 2023).

MMC expects the proposed acquisition to be completed in the first quarter of 2017.