Tenaga Nasional said today it would dispose its stake in another independent power producer (IPP) to Genting Bhd but denied suggestions of a firesale.

The state-owned power firm would sell its 20 percent stake in Genting Sanyen Power to Genting for RM240 million, said Tenaga chairman Jamaludin Jarjis.

Tenaga is also selling 40 percent stake in Kapar power station to Malakoff but he said the deal had been extended by another month to finalise the terms of sale.

He said the Genting deal "marks another milestone for Tenaga to get cash."

"We have good cash cover but we want to bring down our debts. We take our time to sell the IPPs so that we can get better value... there is no firesale," Jamaludin told a news conference.

He said Tenaga, which is finalising its acquisition of a 70 percent stake in Sepang Power, was also negotiating terms to subsequently sell 40 percent stake in Sepang Power to Genting.

Tenaga is to buy the Sepang Power stake from Malaysian Resources Corp Bhd.

Jamaludin said the company wished to retain a stake in Sepang Power so it could have a say in future power purchase agreements to ensure they were fair to Tenaga.

He said Tenaga was maintaining its forecast for electricity demand growth this year at five percent.

Better interim results

Earlier, the company said higher electricity sales and foreign exchange gains had boosted its interim results released Friday.

Tenaga reported a net profit of RM1.569 billion for the six months to February, up from RM1.466 billion in the same period a year earlier.

This was on the back of a 13 percent increase in sales to RM7.459 billion, compared with RM7.055 billion previously, it said in a statement.

Its Pakistan unit, Liberty Power Ltd, contributed to revenues for the first time with electricity sales of RM145.2 million compared to nil previously.

The group's pre-tax profit, which improved to RM1.619 billion from RM1.543 billion, was also boosted by an increase in foreign exchange gain after the weakening of the Japanese yen, Tenaga said.

As of end-February, its total loans stood at RM28.05 billion of which 52 percent are denominated in foreign currency.

The group expects performance to be satisfactory in the second half of the year amid increasing signs of an economic recovery.