1MDB shortlists bidders for energy asset sale

Men walk past a 1 Malaysia Development Berhad (1MDB) billboard at the funds flagship Tun Razak Exchange development in Kuala Lumpur, Malaysia.
Men walk past a 1 Malaysia Development Berhad (1MDB) billboard at the funds flagship Tun Razak Exchange development in Kuala Lumpur, Malaysia.PHOTO: REUTERS

KUALA LUMPUR • 1Malaysia Development Berhad (1MDB), the debt-ridden state investment company, has shortlisted bidders including Qatar's Nebras Power QSC and Hong Kong-listed CGN Meiya Power Holdings for its energy asset sale, people familiar with the matter said.

Saudi Arabia's Acwa Power International and Tenaga Nasional Berhad, Malaysia's biggest listed energy company, were also picked to submit final offers for 1MDB's power plants, the people said.

The assets may fetch an equity value of as much as RM8 billion (S$2.6 billion), according to two of the people, who asked not to be identified as the information is private.

The sale is part of 1MDB's plan to dismantle its assets after it drew criticism from lawmakers for rising borrowings that totalled RM41.9 billion as of March last year. The state investment company owns a net generation capacity of 5,594MW and is the largest independent power producer in Bangladesh and Egypt, according to its website.

Foreign bidders may be restricted to owning no more than 49 per cent of the plants and will be encouraged to team with a local partner, unless they seek an exemption, the two people said.

1MDB said earlier this month that it has selected four parties to bid for its energy unit, without disclosing the names.

1MDB has 3,112MW of capacity in Malaysia, making it the second-biggest independent power producer there after Malakoff Corp, and has also invested in plants in Pakistan and the United Arab Emirates.

The state investment fund is in discussions with potential parties and expects to reach an agreement by the fourth quarter, 1MDB said in an e-mailed statement.

CGN Meiya, Tenaga, Acwa and Nebras were either not available for comments or did not immediately respond to queries when approached by Bloomberg.

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A version of this article appeared in the print edition of The Straits Times on September 24, 2015, with the headline '1MDB shortlists bidders for energy asset sale'. Print Edition | Subscribe