KUALA LUMPUR: Malakoff Corp Bhd rose as much as eight sen or 8 per cent after the company said it had settled legal disputes involving 90 per cent-owned subsidiary Tanjung Bin Power Sdn Bhd's electricity plants.
Analysts said Malakoff was expected to register a one-off gain in current financial year ending Dec 31, 2017 (FY17) after claimant Tanjung Bin signed an agreement with the litigation and arbitration respondents.
"Although this will be a one-off gain in FY17F, we see this piece of news as positive to Malakoff as this will cushion the earnings pressure from the unexpected lower capacity payment from Tanjung Bin Energy (TBE) in 2QFY17, as well as lower contribution from Segari Energy Ventures (SEV) in 2HFY17 onwards.
"Pending further details on the agreement, we maintain our forecast for now," Public Investment Bank Bhd said in a note today.
At Bursa Malaysia, Malakoff shares rose to their highest so far today at RM1.10.
Last week, Malakoff stated the litigation respondents were IHI Corp Japan, ISHI Power Sdn Bhd and IHI Power Systems (M) Sdn Bhd, while the arbitration respondents were Sumitomo Corp, Zelan Holdings (M) Sdn Bhd and Sumi-Power Malaysia Sdn Bhd.