Tuesday September 28, 2010
Khazanah buys into UK’s Camco
By IZWAN IDRIS and YVONNE TAN
KUALA LUMPUR: Khazanah Nasional Bhd will pay a premium to acquire shares in London-based Camco International Ltd, and pump money into a joint venture with the clean energy project developer for the purpose of investing in emission-reduction businesses around the region.
Khazanah managing director Tan Sri Azman Mokhtar told reporters at the World Capital Markets Symposium yesterday that he believed the state investment fund paid “a fair price” for the stake in Camco.
“Investing in environmental technology is the way forward, the amount is relatively small but it is an important investment for us,” Azman said.
Asked on the return on investment from the collaboration, he said: “Our newer investments are hitting about 20% in terms of annual return.” In a statement yesterday to announce the acqusition and the setting up of the joint venture, Khazanah said it would purchase 9.28 million new shares in Camco for £1.86mil (RM9.1mil), or at 20 pence a share.
Additionally, it will acquire a 19.6% stake in Camco from the market prior to the listing of the new shares. Combined, this will give the fund a final shareholding of 23.6% in Camco.
Shares in Camco, which is listed on the London Stock Exchange’s Alternative Investment Market, jumped 40% to 20 pence after the news was announced yesterday.
That was the stock’s highest level since the end of December last year.
On top of stake purchase, Khazanah and Camco plans to form a joint venture focusing on emission-to-energy projects in the South-East Asia region. The JV would have an initial paid up capital of up to US$30mil (RM92.7mil), Khazanah said in the statement yesterday.
The partnership with Camco “will serve as Khazanah’s vehicle to commercially develop the sustainable development sector as part of the New Economic Model and to address the critical need to increase awareness and advocacy of climate change issues in Malaysia,’’ it said.
At the inception, US$14.7mil will come from Khazanah as equity, US$10.15mil as a convertible bond and US$5.15mil from Camco as equity investment, according to a separate press release from Camco.
Khazanah has also committed to contribute a maximum of US$16.05mil (up to 2013) into the joint venture, based on how existing and future carbon contracts perform.
Camco will hold a warrant to subscribe for additional equity of US$3.7mil. At the starting phase, Camco will own a 60.1% share in the joint venture.
As part of the deal, Camco will contribute its existing projects in South East Asia (excluding China) and its emission reduction project development and investment business pipeline for the region.
Camco has a 20-year track record in carbon project delivery with presence in the US, UK, Europe, China, Africa, Russia and SEA.
“Khazanah is the optimal long term investor for Camco in the SEA region,’’ Camco’s chief executive Scott McGregor said in the statement released by Khazanah.
“Combining Camco’s expertise and operations together with Khazanah’s regional investment footprint, knowledge and relationships will enable Khazanah to develop institutional knowledge and establish a business platform that can quickly realise and implement Clean Development Mechanism (CDM) projects in Malaysia and throughout SEA,’’ Khazanah said.