Syed Mokhtar AlBukhary, a Malaysian tycoon, is seeking to unlock value in his infrastructure and utilities group, MMC, which he delisted and took private over two years ago. Reports suggest that the tycoon is negotiating with U.S.-based infrastructure investor Global Infrastructure Partners (GIP) to sell up to 49% of MMC Port Holdings, which operates seven ports around the Straits of Malacca, one of the world’s busiest shipping lanes. The deal could value the unit at more than 30 billion ringgit ($6.3 billion) and potentially lead to a listing on the Malaysian stock exchange. MMC and GIP have not responded to emails requesting comment.
MMC, which is the former rice trader’s biggest asset, plans to invest 26 billion ringgit over the next five years to upgrade its key port of Tanjung Pelepas in Johor state, creating more than 23,000 jobs. The company operates in the ports business, with a stake in MMC Port Holdings, which is the country’s biggest port operator and operates ports such as Tanjung Pelepas, Johor Port, Northport, Penang Port, and Tanjung Bruas Port. MMC Port Holdings operates in the busiest shipping lanes and has a significant presence in the port of Tanjung Pelepas, which is the largest transshipment hub in Southeast Asia.
The Malaysian tycoon also has a majority stake in DRB-Hicom, an automotive firm with interests in property and services. Syed Mokhtar AlBukhary’s fortune fell 19% to $1.3 billion.
AlBukhary, however, has recently suffered a setback when he failed to close a deal with Global Infrastructure Partners (GIP).
After completing due diligence on MMC Port Holdings Sdn Bhd, the New York-based investment firm couldn’t reach an agreement on a price for the stake, the people said, asking not to be identified as the information is private.
Tan Sri Syed Mokhtar Al-Bukhary was seeking a valuation of RM15 billion (US$3.2 billion) to RM20 billion (US$4.27 billion) for MMC Port, which would have made it Malaysia’s biggest-ever ports deal, the people said.
Representatives for GIP and MMC Port did not respond to requests for comment.
Malaysia’s The Edge previously reported unidentified sources saying that GIP had been considering buying a stake in MMC Port.
While GIP has put its plans on hold, other bidders for a stake could emerge, the people said.
Founded in 2006, GIP manages US$112 billion in assets ranging from energy and transportation, to water and waste, its website shows. BlackRock Inc agreed in January to buy GIP for about US$12.5 billion, in a deal expected to close in the third quarter.
MMC Port is the port business unit of Syed Mokhtar-owned conglomerate MMC Corp Bhd. It operates seven ports in Malaysia, including in Johor and Penang, according to the company’s website. It also has cruise ship terminals.