KUALA LUMPUR (July 10): Electricity supply to Cahya Mata Sarawak Bhd’s phosphate production plant housed under the group’s subsidiary Cahya Mata Phosphates Industries Sdn Bhd (CMPI) has been cut off.

This came after the Court of Appeal dismissed CMPI’s bid for a preservation order to bar state utility firm Syarikat Sesco Bhd from terminating power supply to the plant, said Cahya Mata in a bourse filing on Monday (July 10).

Cahya Mata sought the preservation order to maintain status quo, pending its appeal against the Kuching High Court’s decision in June to dismiss its interim injunction application.

“The Court of Appeal did not grant the preservation order, which then led to Sesco terminating the electricity supply to CMPI’s plant at 12.30pm this afternoon,” the diversified group said.

Cahya Mata said the power shutdown is not expected to have a material business, financial or operational impact on the group.

“The top management of Cahya Mata will continue to assert its claims through arbitration proceedings, as well as to explore all other possible legal recourse to protect all [of] its rights,” it added.

CMPI, formerly known as Malaysian Phosphate Additives (Sarawak) Sdn Bhd, and Sesco have been embroiled in a dispute related to a power purchase agreement (PPA) dated Jan 15, 2019, since November last year.

According to Cahya Mata’s latest annual report, the group must either take a minimum electric supply capacity based on the computation in the PPA upon commencement of commercial operations of the phosphate plant, or pay for the electricity consumption shortfall.

The disagreement began when Sesco billed the group for cumulative electricity consumption shortfall and payment security shortfall amounting to RM266 million as at end-December last year, despite Cahya Mata contending that the plant is not deemed to have commenced commercial operations.

CMPI first attempted to obtain an interim injunction order from the Asian International Arbitration Centre during arbitration proceedings. After the arbitrator refused to grant the order, the company turned to the High Court for the interim injunction but the court dismissed the application.

According to Cahya Mata’s earlier filing dated June 20, the plant’s commercial operations have still not commenced but are undergoing the final stages of commissioning.

In the same filing, the group also noted that “any power shutdown will impact the project’s timeline” and “any potential shutdown would have a financial impact on the operations of the plant and the company (CMPI)”.

Shares in Cahya Mata ended one sen or 0.94% higher at RM1.07 on Monday, giving the group a market capitalisation of RM1.15 billion.

Read also:
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