KUALA LUMPUR: Tenaga Nasional Bhd’s (TNB) divestment of 100%-owned Liberty Power further streamlines its’s international portfolio towards renewable energy, according to Maybank Investment Bank (IB) Research.

       The disposal of Liberty Power was to Pakistan and Hong Kong-based AsiaPak Investments for US$54.5mil (RM228mil) cash, received by TNB in entirety on Nov 29, 2021.

       TNB estimated the disposal gain at US$5.3mil (RM22mil).

       Liberty Power owns and operates a 235 megawatt combined-cycle gas power plant in the Sindh province in Pakistan.

       “Commissioned in 2001 and with a power purchase agreement expiring in Sept 2026, Liberty Power was one of TNB’s first international greenfield ventures,” said Maybank IB Research.

       Liberty Power accounted for a mere 1% of TNB’s revenue in the financial year ended Dec 31, 2020 (FY20).

       TNB though, has had to impair RM190mil of Liberty Power’s receivables in the first nine months of 2021.

       Maybank IB Research said the divestment was not unexpected, with TNB management having flagged such intentions in previous results briefings.

       The research unit added that the financial impact from the divestment is immaterial to both TNB’s earnings and balance sheet.

       Maybank IB Research also adjusted its earnings estimates for Cukai Makmur or Prosperity Tax, lowering its FY22 estimated net profit for TNB by 5% to reflect management guidance.

       “We do not expect TNB to be worse off relative to the second regulatory period. Valuations are compelling, and TNB has the required balance sheet strength to fund its sustainability ambition,” said the research unit.

       Maybank IB Research reiterated its “buy” call on TNB with an unchanged RM12 target price.