Fundraising

Exclusive: 1MDB targets $3.4bn from energy asset sale

The Malaysian sovereign fund is set to announce an official shortlist, which will likely include three international bidders and one domestic company, by the end of the month.

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The sale of 13 energy assets within its Edra unit to reduce 1MDB’s debt load is underway and the shortlisted bidders are currently conducting detailed due diligence.

Datuk Johari Abdul Ghani, Deputy Minister of Finance of Malaysia, told Infrastructure Investor: “We are looking at the range of valuation from MYR15 billion (€3 billion; $3.4 billion) to MYR20 billion for the power asset sale.”

He confirmed that there are three international bidders and one local bidder involved, but did not identify the parties.

Ghani also said an official announcement of shortlisted bidders is expected by end of October.

Previously, press sources have disclosed an unconfirmed list of four shortlisted bidders for the asset sale. The bidders comprise Saudi Arabia’s ACWA Power International, Qatar’s Nebras Power QSC, Hong Kong-listed CGN Meiya Power, and Malaysian state-owned energy company, Tenaga Nasional.

ACWA Power, the Saudi Arabian energy producer, admitted its interest in 1MDB’s power assets but has not been shortlisted to submit final offers, a statement said.

Nebras Power didn’t respond to e-mailed queries, nor make any statement on the topic.

CGN Meiya Power confirmed that it had been involved in preliminary discussions to acquire 1MDB’s energy assets, according to a recent filing to the Hong Kong Stock Exchange. However, no binding or definitive acquisition documentation had been entered into by the company at the time of filing.

Tenaga Nasional’s president and CEO Datuk Seri Azman Mohd said today the company is in the midst of carrying out the due diligence process.

The deadline for the bidders for non-binding offers is October 16, according to a local press report. 

1MDB is Malaysia’s second-largest independent power producer and the largest in Bangladesh and Egypt. Its power unit Edra has five domestic and eight international power plants with total capacity of 5.5 gigawatts that are estimated to be worth MYR12 billion collectively.

Aiming to reduce its $11 billion of debt to a manageable level by this year’s fourth quarter, the fund is also divesting its land assets, the latest of which is a 318-acre land parcel in Pulau Indah, now in a tendering process.