A Malaysian upstart that has challenged the dominance of Singapore's huge container port may sell a stake to its rival and hold an IPO, a Kuala Lumpur daily reported on Saturday.
Singapore's PSA Corp, owned by the government investment agency Temasek, would buy into a subsidiary of 4-year-old Port of Tanjung Pelepas (PTP), the Star newspaper said, quoting an unidentified industry source.
PTP, controlled by Malaysian tycoon Syed Mokhtar Albukhary, has grown rapidly out of the mangroves facing Singapore - prompting a price war with PSA, the world's largest trans-shipment hub.
"The partnership will result in PSA moving some container trade to PTP," the source told the paper.
Temasek, which this year bought into dominant telecom firm Telekom Malaysia Bhd, has held talks with PTP - amid signs of warming ties between the two Southeast Asian neighbours.
Also on the cards for PTP was a merger with sister port, Johor Port Bhd. and an initial public offering, although Syed Mokhtar's Malaysia Mining Corp Bhd. would retain control with a 51 percent stake, the source said.
The Star said PSA would be invited to take a stake in an almost completed two-berth expansion of PTP, rather than the whole port, which is 30-percent owned by Danish shipping firm Maersk Sealand, a key customer.
"It makes sense for PSA to take up a stake as it now spends millions on subsidies after having (to) slash its rates," the source said.
Officials from PSA, Temasek and PTP were not immediately available to comment.
Syed Mokhtar, a media-shy businessmen who had close links to former Malaysian prime minister Mahathir Mohamad, controls both PTP and Johor Port. He has a broad array of interests from power stations to hotels.
Bilateral relations between Malaysia and Singapore have often been prickly over the past two decades but new prime ministers in both countries have raised hopes of friendlier ties.
PTP reported last month a 25 percent jump in containers handled in the first half of the year to 2.0 million 20-ft equivalent units (TEUs), but it is dwarfed by PSA, which handled 9.9 million TEUs in Singapore in the same period, up 15 percent from a year earlier.
Globally, PSA handled 16.1 million TEUs in the first half, up 19 percent. It has investments in port projects in Belgium, Brunei, China, India, Italy, Portugal, South Korea and Thailand.
Shares in Malaysia Mining, flat on Friday at 1.84 ringgit, have fallen 10 percent so far this month, in a wider market down three percent.
Johor Port shares fell 0.9 percent on Friday to 2.17 ringgit, taking their loss so far this month to nearly four percent.