KUALA LUMPUR (Mar 16): Pasdec Holdings Bhd has decided to sell its subsidiary that is developing the 5MW mini hydro power plant project in Bentong, Pahang, for RM1.2 million amid cost escalation, while recouping RM10.8 million of advances provided to the subsidiary.

Pasdec said it is divesting its 100% equity interest in Pasdec-Mega Sdn Bhd to SPAC Sdn Bhd, which is wholly owned by Sy Choon Yen.

The loss-making property developer said the construction costs to complete the project has escalated significantly from the original budgeted costs.

This is due in part to the additional costs needed to repair the damaged pipes caused by a flood in 2020, coupled with increase in material prices, the group said in a filing with Bursa Malaysia.

According to Pasdec, SPAC has specialised experience and expertise to complete the project at the Sungai Benus river in Janda Baik.

Pasdec expects the disposal to be completed by the fourth quarter of this year.

According to its latest annual report, the group is 41%-owned by Jasa Imani Sdn Bhd, which is controlled by Pasdec’s executive deputy chairman Datuk Seri Tew Kim Thin and his brother Tew Kim Kiat, who sits on the board as group managing director.

Pasdec's second largest shareholder is the Pahang State Development Corp, with a 26% stake.

Shares of Pasdec closed 1.5 sen or 4.8% higher at 32.5 sen on Thursday (March 16), giving the group a market capitalisation of RM130.12 million.