Mudajaya ... Sep10

Asgari, former chairman of the Malaysian Venture Capital Association and a seasoned venture capitalist now appointed non-executive chairman of Mudajaya on Aug 30 2010 says the presence of Indian engineering firm Enerk International Holdings Ltd as a minority shareholder in a Mudajaya Group Bhd subsidiary in India that has a lucrative construction contract, was purely a commercial decision that had been disclosed and approved by Mudajaya shareholders in 2007.

Enerk is very deeply involved in the project. In fact, they are driving parts of it and are very technically competent. There are about 100 approved IPPs (independent power producers) in India so parties like Enerk are being wooed by many players. Hence it was a commercial decision to give them shareholding so as to get their participation in its project.

Asgari, a former chairman of the Malaysian Venture Capital Association and a seasoned venture capitalist, was appointed non-executive chairman of Mudajaya on Aug 30 2010.

Asgari also said the grouse about Mudajaya paying a premium for its stake in the Indian power plant had been disclosed and approved by Mudajaya shareholders. The project was a very viable one and seven top Indian banks had provided project financing for it. RKM Powergen (the vehicle that owns the power plant) had raised around RM3.6bil for the IPP.

Asgari also said Mudajaya was debt-free and had earnings from other projects which put it in a good position to finance the acquisition of the power plant.

Mudajaya had so far paid RM240mil for its stake in the power plant and that it planned to invest the balance RM631mil, using its own cash of RM295mil as well as internally generated funds.

According to one banker familiar with the situation, the answers provided by Mudajaya adequately clarified the issues raised by the Bursa query and that the exchange is unlikely to pose more questions.

In a related development, the SC was still awaiting a special report on Mudajaya by the company’s auditors in its review of the latter’s Indian IPP project. It is understood that a draft of the special report had earlier been submitted to the SC in addition to answers to questions from the regulator and that Mudajaya is in the process of submitting the final report to the SC.