Fundraising

Four bidders shortlisted for $1.8bn of Malaysian energy assets

Malaysian state investment fund 1MDB is seeking to reduce its $11bn of debt by selling its power assets.

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Despite being the subject of multiple investigations amid allegations of financial mismanagement and graft, 1 Malaysia Development (1MDB) is seeking to offload some of its assets held under its power unit, Edra Global Energy (Edra), to reduce $11 billion of debt it has accumulated since its establishment in 2009.

After several local and foreign buyers submitted their proposals, the debt-laden fund has shortlisted four parties for the final bidding stage in the sale of its power unit, Edra Global Energy.

People familiar with the matter told Bloomberg Business that the shortlisted bidders comprise Saudi Arabia’s ACWA Power International, Qatar’s Nebras Power QSC, Hong Kong-listed CGN Meiya Power, and Malaysia’s biggest listed energy company, Tenaga Nasional.

It is reported that the assets may fetch an equity value of as much as MYR8 billion (€1.6 billion; $1.8 billion). Foreign bidders may be restricted to owning no more than 49 percent of the plants and will be encouraged to team with a local partner, unless they seek an exemption. 

The state investment fund expects to reach an agreement by the fourth quarter of this year, according to a statement.

Owning a net generation capacity of 5,594 megawatts (MW), 1MDB is the largest independent power producer in Bangladesh and Egypt and the second biggest in Malaysia after Malakoff Corporation. It also holds assets in the United Arab Emirates and Pakistan through joint ventures.

Its power unit Edra has five domestic and eight international power plants with total capacity of 5,500MW that are estimated to be worth MYR12 billion collectively.

Riyadh-based ACWA Power is a power developer, owner and operator across 10 countries, with a generation portfolio of 15,731MW of power. Nebras Power, which is headquartered in Doha, is developing power projects in the Middle East and seeking acquisitions in regions including Southeast Asia and Europe.

State-backed CGN Meiya Power is an arm of China General Nuclear Power Corporation (CGN), China’s biggest atomic power generator, with a diversified portfolio of wind, solar, gas-fired, coal-fired, oil-fired, hydro, cogen and fuel cell power generation projects and a steam project in China and South Korea.