Tuesday 24 November 2015

Edra sold and they say it's okay

The verdict:

Edra Energy sells all assets to Chinese firm

So, Tenaga Nasional Bhd (TNB) lost the bid.

I'm actually not surprised.

I first felt that TNB was going to lose when my friend Wan Dal Cha who is quite knowledgable about the energy sector sent me a short but enlightening note which I highlighted in this post :

TNB staring at unequal competition

Of course TNB can't compete with the Chinese energy giant in the bidding.

It was a David versus Goliath fight.

In case of the real David, he was trying to beat the giant Goliath with a sling shot and he was successful when the stone hit the intended target.

No such luck though for TNB.

I think it was no match from the start.

The outcome must had been decided even before the bidding begins.

The Chinese giant simply have more money than TNB to make the winning bet.

I have to admit that I was cheering in vain for TNB.

When a friend asked me to highlight a Bernama story which supports the sale of Edra's equities to a foreign company,  I knew that TNB was to lose the bid for certain.

Still, I republished the Bernama story in this post:

About being fair on the Edra Energy issue

It basically tries to assure the public that it's alright to open our energy sector to foreign companies.

The foreign companies cannot switch our light off as they please, it seems to suggest.

Here are excerpts of the Bernama report with the assurances in bold:

A researcher told Bernama, "The energy business is never as free as the operators may want it to be due to strong control mechanism, licensing and multiple regulatory bodies, including the Ministry of Energy, Green Technology and Water and Energy Commission."

For instance, he said, tariffs for the existing Independent Power Producers (IPPs) are fixed under the long-term Power Purchase Agreement (PPA) for the life of the PPA, and any revision to these tariffs will require the consent of EC and Tenaga Nasional Bhd (TNB).

He pointed out that there is also the primary fuel supply for the power plants which must be sourced from government-linked or controlled entities.

Currently, TNB controls coal supply and Petronas supplies gas.

"Gone are the years when a particular IPP could dictate 'take or pay' on TNB. Today TNB, which has total control of the National Grid, calls the shots. TNB will buy what it needs and not whatever IPPs produce," he said.

He stressed that TNB has full control over IPPs, foreign or local, because under the PPA, TNB could step in to take over the operations of a plant in the event of contract breaches.

Asked if foreign companies could use lower cost structure (from economies of scale) to undermine local operators, he said they must first have a huge market share in terms of capacity and fuel usage.

In the case of Edra Global Energy Bhd, which is now up for sale, its effective share of installed generating capacity in Peninsular Malaysia is only 14.6 per cent, significantly behind market giants TNB (50 per cent) and Malakoff Corporation Bhd (25 per cent).

For fuel share in Peninsular Malaysia, Edra utilises around 17 per cent for total gas-fired capacity and approximately 15 per cent effective share of total coal-fired capacity. And it has no hydro plants.

"With such a marginal share, Edra poses little threat on all fronts, especially in view of TNB's dominant and unique market position across all three segments of fuel supply, generation and transmission, its robust financial strength (total assets of more than RM110 billion) and familiarity with the local IPP industry," he said.

He also allayed fears that Malaysians would lose their jobs, saying there is no evidence to suggest that foreign companies would bring in foreign workers to replace Malaysians.

The Malaysia Investment Report by the Malaysian Investment Development Authority (MIDA) states Malaysia had approved investments of up to RM235.9 billion in 2014 which could potentially create about 178,360 job opportunities.

Foreign investments formed 27.4 per cent of the total investments (RM64.6 billion).

It is notable that many countries, including Singapore, Australia, Indonesia and the United Kingdom (UK), permit 100 per cent foreign ownership of power generation plants.

Hong Leong Investment Bank Research's energy analyst Daniel Wong was reported to conclude that even if the assets were sold to foreign companies, TNB would still remain a defensive stock and its role in the transmission of the nation's electricity would not be jeopardised.

Honestly, I suspect that the anonymous analyst quoted extensively in the Bernama report was actually from 1MDB.

It's to justify the impending sale.

But I think the excuses given seem to be quite good.

But all that doesn't matter now as the sale of Edra's equities had for all intents and purposes been concluded.

Let's just wait and see where TNB is going to be just two years from now.

If it suffers because of all these, then just wait for the next general election to do the right thing.

If by that time TNB collapsed, I suggest you all go and vote for Lim Kit Siang and gang.


  1. What a fantastic business model by our PM. (He's the ultimate boss, anyway).
    Buy high, sell low.

    Buy for RM18 Billion, sell at RM9.83 Billion.

    Is this what they called 'Rationalization plan' ?

    By the way. Had anybody heard when will our PM and wife are going for their usual stealthy overseas year-end vacation?


    1. If it's okay with Najib ,it should be OK with UMNO . Whatever the rest thinks does not matters .

    2. Mereka tersilap rujukan. Sebenarnya nak guna "rationalisation" yang digunakan dalam perniagaan, tetapi tergunapakai rationalisation yang digunakan dalam bidang psychiatry yang bermaksud (lebih kurang) "making excuses" atau memberi alasan.

    3. Erm....you omitted the part about CGN and it's subsidiary companies assuming all the gross debt of Edra Global, estimated at RM11 billion.

      And unintentional mistake, no doubt.

      How did Edra Global chalk up debts of RM11 billion? Were it's bankers breathing down it's neck?

    4. how come there is 2 tebing tinggi...?

      >james bond

  2. What a suggestion....tunggu collapsed...why can't we prevent it...it was m'sian co...now bagi kat org..ha..ha..1mdb biz m.o


  3. "So, Tenaga Nasional Berhad (TNB) lost the bid."

    So how come all of us here are not surprised?

    When it comes to 1MDB, these morons who are lording it over us, will stop at nothing. They will even gladly sell their own mothers, it seems.

    So much for national security or national interest being paramount.

    And they expect the rakyat to bear it with a grin.

    This is the Malaysia we have become.


  4. Money is the king's ,whoever has more money can decide what the future will be.

    The king will decide for us .

    1. Which means that China with close to US$3 trillion in reserves is the "king"?

      Even Abu Dhabi & Qatar can't compete at that level!

  5. That is the overt business justification but what is their covert selfish motivation?

  6. Beli guthrie dalam dawn raid di pasaran saham london adalah tindakan patriotik. Jual edra kepada entiti asing walaupun dibantah oleh menteri tenaga adalah tidak patriotik. Orang yang brrtanggung jawab merintis skim ini hingga mengakibatkan sektor tenaga terdedah kepada entiti asing adalah tidak patriotik.

    Sewajarnya menteri tenaga letak jawatan sebagai tanda protes. Ketuanya yang tidak patriotik itu dah umum mahu pegang kuasa dan sandang jawatan hingga tempohnya berakhir.

    1. Serba tak kena dengan rakyat Malaysia ni. Sama macam kisah dua beranak dengan seekor unta. BIla anak naik unta bapak jalan kaki orang kata anak tak hormat bapak. Bila bapak naik unta anak jalan kaki orang kata bapak tak prihatin terhadap anak. BIla dua dua naik unta orang kata tak kesiankan unta tu yang terpaksa tanggung beban yang berat. BIla dua dua jalan kaki dikatakan bosoh, ada unta tak naik.
      Yang jadi unta dalam konteks Malaysia ialah Rafizi and the gang

      Prof Kangkung

  7. Red shirts and Ikan bakar should go and throw stones and threaten to bathe in blood in front of Chinese Embassy. Tak berani? Maruah lanchiao.

  8. If TNB won the bid, how would 'rakyat' react? National plight or another bailout?

    1. Bailout apekejadahnya.

      Beli RM18, jual RM 9.83 Billion. Gila-babi punya 'Untung' .

      Satu hari nanti, bila kerajaan rasa IPP mesti di bawah entity tempatan, 1MDB akan membelinya kembali dengan harga RM18 Billion. Pada masa tu, mungkin ia sudah jadi Nuclear Powered yang sudah usang dan bocor sana-sini.

  9. Wanna follow after Australia, UK, and Indonesia eh? Why don't Ah Jib down himself from dictatorship first like in Australia, UK, and Indonesia?


  10. Well, at least Beijing will have a ready guaranteed supply of power when it takes overall the littoral countries of the South China Sea.
    Also read another posting that Shameless' s son -in-law was handed a multimillion dollar contract to refurbish Malaysian mission in US. if true, dunno what more to say. It's like the last days of Hitler, with Goering et al mass looting Europe before the end.

  11. Who cares. The whole country is on a fire-sale and free-fall. Thieves are in control. Oh, yes for the ordinary folks rise up and keep chanting the famous mantra "Bangsa, Agama dan Negara". Nevermind you are poorer by the day.

    1. They are the perverted mutants of the Malay race .... bangsa bukan, agama bukan, negara bukan.
      Patut diorang syaitaniyah f**k off!

  12. Dulu China nak takluk Malaya melalui Komunis Chin Peng. Tapi dibantah UMNO dengan pengorbanan Angkatan Tentera & Polis. Sekarang China dapat takluk Malaysia melalui Arul Keling secara ekonomi licik. Dengan persetujuan anak Tun Razak. Arwahnya susah payah pergi berbaik-baik dengan China supaya mereka tak kacau kita. Rupanya anak dia senang2 serah strategic asset kita (at a loss pulak tu ikut buy high sell low biz model.) Entahlah apa lagi nak serah pada China - Air Force Base?

    1. Jangean ceakap baniaklah ... pegi cali ayam mulah lan makian kangkung sulah cukup kenyang mahhh .... ah jib gor lanti malah lu tania manyak manyak pasal lea buat suka hati lea ah

    2. Easy solution, bro. Just invite the US Sixth Fleet and the US Air Force to make regular pit stops in Sabah. Provide them with basing facilities in Kuantan, Butterworth and Laguna.

      That will show them PLA types that no one screws around with us.


    3. local girls hsppy with blue eyes. can even get uncle sam passport. more pinoys will come to kk.

  13. Wah Rocky pun sudah happy. Spin pulak pasal TNB tak kena blame bail out 1MDB...

  14. Hi Annie,
    Only a chinese company from China dare to take such risk buying 1MDB Edra. Mind you they are paying cash and also assume the debt. For 1 thing, I consider this as win win for these party. For China, they want a foothold into energy sector and they have plenty of cash. For Najib, they want to release the pressure build up over 1MDB debt, and they needed cash and China can provide this.
    This will ease the burden of the 1MDB short term, but long term there still some problematic debt that need to be resolve.
    However, for democracy, transparency and benefit of the rakyat, this is what missing, we still cannot recover the billions lost and overcharge due to the hanky panky dealings and those responsible for this has not been caught. The investigation still ongoing and Najib is responsible for this mess to begin with. He should shoulder this responsibility and resign. For whatever, he has payed a high price for this and due this Malaysia has lost some credibility and the economy took a hit. At the moment, this is salvage work and will impact the election.
    There is high chance, very high chance, more states will fall to the opposition come next GE. So nothing to be surpirse when the rakyat vent their anger on all these fiasco.

  15. Had anybody heard when our PM and wife will be going for their usual stealthy overseas year-end vacation?

    I tried asking Azmi Arshad's FB but now I can only read what he posted and could not comment. Looks like I have been 'filtered'.

    1. not filter but deleted

    2. Whatever it is, Najib camp had follow the opposition method dealing with dissent. Looks like UMNO dan emulated DAP politics. If you do not show 'love and affection' to dear President, you get booted out. No more 'cari-makan' for you in UMNO. Ikan-bilis will be the first to get the boot.

      Azmi Arshad puts words into my mouth, that RM42 Billion went mising due to Najib.
      Then he accused me of 'fitnah'ing their beloved leaders. That I meroyan when TH buy that primeland. When IPP went to foreigners, I will also meroyan.

      That fact is, 1MDB MUST sell of it assets, no matter what, just to service interest on principal debt. To settle debt, asset had to sold off and I hope that prime-land would remain in local hands.

      The difference, when Rakyat's asset (IPP) was sold to locals bodies or foreigner lies in the terms & condition agreed upon between a willing buyer and seller. We will never know since these documents are usually classified OSA. However, who dictates over the deal, usually depends on who needs the 'cash' the least.

      If the GLC got the deal, of-course the gomen on behalf of the Rakyat can dictate the price.

  16. Why all the fuss. We all vote for UMNO, BN and Najib as our leaders. We tolerate the system that make it very difficult to remove corrupt and incompetent leaders unless through elections, which can be manipulated in many ways so as to give unfair advantage to the incumbents.

    Just stand in front of a mirror and say loudly "i am fucking myself". You just deserve it.

    1. Just like PAS, DAP and PKR have been masturbating each other in the RIP Pakatan Rakyat.
      And now its Pakatan Harapan and yet you still want that rejected ex-UMNO sodomite cum abuse-of-power ex-convict to be our future PM. Not to mention, worst than DAP, a party which practices nepotism to the hilt.

      With DEIG and bluff on land reclamation by The Tokong, these politicians are worst than UMNO. At least UMNO become bad during Pak Lah and worst when Najib took over.

    2. From what we are experiencing in the states, they are definitely better than UMNO/BN. They don't blatantly ripped the rakyats. Despite not holding power, UMNO in opposition states still want to cari makan. What a greedy lot, they are.

    3. At least if PR is in power, someone is going to be held responsible for the 1MDB fiasco. And if PR, drunken with new-found power, also do funny things, we vote for BN in the next election. BN will then do the same to PR crooks ie send them behind bars. Lama2 puak2 ni will toe the line. Baru betul, rakyat is king.

  17. The purpose of TNB is to see that the country is supplied with electricity. To achieve that goal, it must:

    1. Generate electricity, and
    2. Distribute electricity.

    It's strength is in distribution, due the network it has built up over the years.

    Efficiency in electricity generation is something else. It requirements are different. It would eg have to procure own fuel. While most of the first generation ipp power plants depended on Petronas for gas supply, it is likely that in the future, Edra's power plants may have to import the gas they use. The International Energy Agency has predicted that by 2017, Malaysia will be a net oil and gas importer.

    Why else do you think some 3/4 of Singapore's power generation plants are foreign owned?

  18. Don't add salt to injury. We already have severe trust deficit in our leaders, now we have this news. I pity those in TNB. 2 years down the road, there will be golden handshake..... melayu juga jadi mangsa.... lena ke tidor our malaysian leaders?


  19. “ This investment represents a major commitment by CGN Group as part of a long-term, global diversification initiative. We are extremely impressed by the highly regulated, stable and transparent independent power producer framework in Malaysia, which has given us the confidence to make a long-term investment to the country ..”

    -- Chairman of CGN Power Corporation, Mr He Yu on 24th November 2015
    ( China General Nuclear Power Corporation )

    Haji M Zin
    Alor Gajah DPH

    1. And your point is what Al Gajah?

    2. Al Gajah? Kahkahkahkahkah....

    3. Do you not see how your Lord dealt with the Army of the Elephants?

      Did He not make their treacherous plan go astray?

      And sent against them flights of birds,

      Raining down upon them stones of hard clay?

      And your Lord turned them into an empty field of stalks and straw, (of which the corn has been) all consumed.

      (Quran: The Elephant)


    4. This is +ve for TNB, Sdr ANON 08:13 and 20:12
      which is mentioned as a concern here.
      The sale of Edra has nothing to do with Alor Gajah.

      " We are positive on the news which will put an end to speculations and concerns on Malaysia-listed power utility companies especially Tenaga, in bailing out 1MDB at high valuation,"
      -- Hong Leong Investment researcher Daniel Wong on 23rd November 2015

      Haji M Zin
      Alor Gajah DPH

  20. Don't worry lah, TNB won't collapse!

  21. Your friend Mr Wan must have been drunk with dalcha when he wrote this.

  22. The deal should include free Malaysian passport for 20 million mainland Chinese. Then only it makes sense.

  23. There is nowhere to go for UMNO but downhill. Perhaps FINAS can start writing the script for "Requiem for lost and clueless siblings"

  24. where are the red shirts, ikan bskar man , perkasa and isma. umno selling to chinaman again?

    1. Still scratching their heads and waiting for instruction from big boss. The mainland Chinese are not here at the invitation of the petaling street traders but Ali Baba and the forty thieves. Is kampong keramat next on the list?

    2. us o ba ma was here last week. send 7 fleet to tanah melayu and no z$$$Z? sell rest of 1mdb to counter chinaman?

  25. There are 35,000 TNB staff. Assuming an average of five voters are closely connected to each staff, 175,000 voters who will have a hard decision to make whether to vote for BN or not in next GE.

    During Najib's last visit to TNB, he was hailed as their hero...

    1. we still have ikan bakar and his red shirts. not enough can minta tolong from red beans and china red guards

    2. Comments 20:58 and 21:37 are objective.

      When Malaysia becomes a net importer of oil and gas, procuring such will be a big issue for IPPs. It's something that TNB would be happy to let others do. Come that time, China's technology and financial clout together with Qatar's Middle Ease oil and gas connections will be important for Edra. TNB will confine its role to being the 'importer' and distributor.

      Do Aeon and Tesco need to produce every item sold on their hypermarket shelves?

      Do our biggest developers: MRCB, Mah Sing, SP Setia, IGB etc need to actually construct the buildings that they develop for sale?

      Of course not. Instead, companys should rely on their comparative advantages.

      If not, it will just waste more and more of their resources. One excellent example of which is PROTON.

    3. Annie,
      To anon 28Nov 8.50

      Electricity is a basic amenities,why should China subsidise for Malaysians' bliss when energy price spiraled.

      Eventually,the Malaysian govt. will have to subsidise this Chinese entity


    4. 13:55 - Who subsidises who here? Was the Singapore government stupid to sell PowerSeraya to YTL?

      PowerSeraya Limited is one of the key energy players in Singapore, generating about 30% of the country’s energy needs through its multi-utilities platform. With a primary focus on generation and retailing of electricity, the company also offers steam, water as well as physical oil trading and storage services. Its core business with a licensed generating capacity of 3,100MW is situated on Jurong Island - Singapore's oil, gas and petrochemicals hub.[1] [2]

      PowerSeraya sells electricity to customers through its retail arm, Seraya Energy, and manages fuel purchases through its physical oil trading arm, PetroSeraya. Its operations are supported by its corporate office located at HarbourFront. PowerSeraya was spun off from Singapore Power to become a Temasek Holdings-linked company in 2001. On 6 March 2009, the company was divested from Temasek Holdings to become a wholly owned subsidiary of YTL Power International Berhad.