CLP Holdings has agreed to sell its 5 per cent stake in Malaysia's YTL Power International for M$320.98 million (HK$658.77 million) as part of a consolidation of its regional asset portfolio. The Hong Kong company signed an agreement yesterday to offload 116.72 million YTL shares to the Malaysian firm's largest shareholder, YTL Corp, at M$2.75 per share. The sale marks an end to CLP's brief foray into the Malaysia power market following a government decision to call off a planned privatisation of state-owned power firm Tenaga Nasional, a CLP spokeswoman said. CLP bought its YTL stake in 1999 as a stepping stone to take part in the privatisation. The sale also ended months of speculation after a three-year standstill agreement forbidding CLP to sell any YTL shares expired last September. 'The sale to YTL Corp puts CLP in an advantageous position because of the stock's thin liquidity,' the CLP spokeswoman said. 'The sale price is also reasonable.' The sale price of M$2.75 per share was close to the value of M$2.80 on CLP's books, with analysts anticipating a negligible loss as a result. CLP wrote down HK$130 million in 2000 on the depreciated value of the stake. The sale price represented a 10.71 per cent discount to YTL Power's closing price of M$3.08 yesterday. The sale, pending Malaysian Foreign Investment Committee's approval, is expected to take several months to complete. CLP intended to use the sale proceeds for general corporate purposes, the company spokeswoman said. Despite its exit from Malaysia, CLP remained optimistic about the future prospects of the region's power market, she said. Some analysts welcomed the sale, with JP Morgan head of regional utilities research Bill Laukka saying: 'The decision to sell the stake makes sense as YTL Power has lost its strategic value.' ABN Amro Asia analyst Alvin Tan expects CLP will reinvest the sale proceeds in its regional power projects such as in Thailand. 'CLP wants to focus on markets where it already has a presence,' he said. CLP's regional portfolio includes power plants on the mainland, Taiwan, Australia, Thailand and India.