KUALA LUMPUR: YTL Power International Bhd's disposal of its 33.5 per cent stake in ElectraNet Pty Ltd is expected to translate into a sizeable estimated gain of RM2.2 billion, MIDF Research said.
The firm said the majority RM2.7 billion (or 89 per cent) of the RM3.06 billion proceeds from the sale was expected to be redeployed for future investments in the next three years.
"Another RM306 million (10 per cent) is expected to be utilised for general corporate purposes.
"While it is too early to speculate the areas in which the capital will be redeployed, we note that YTL Power recently ventured into the data centre business via acquisition of Dodid Pte Ltd, which owns a 12.5 megawatt (MW) Tier-3 data centre in Singapore, with a longer -term plan to build 300MW of green data centre capacity across the region by 2030," it said.
Yesterday, YTL Power proposed to dispose of its 33.5 per cent stake in ElectraNet to Australian Utilities Pty Ltd, a trustee of Australian Utilities Trust (AUT), for AU$1.03 billion (RM3.06 billion).
The deal is expected to be completed by end of the second quarter of 2022.
MIDF Research said the 33.5 per cent stake was bought by YTL Power in December 2000 for AU$58.5 million (RM122.9 million) and as of end of financial year 2021 (FY21), entailed a carrying value of AU$258.2 million (RM769.3 million).
MIDF Research said the deal effectively valued ElectraNet at an estimated 42.8 times price to earnings ratio (PER) and represents 1.6x the group's regulated and contracted asset base - which was a reasonably attractive valuation.
The firm left its projections unchanged pending completion of the deal.
MIDF Research has maintained its "Buy" call on YTL Power with an unchanged target price of 80 sen.