Archive for October 18th, 2015

Malaysia’s 1MDB Gets Bids for Power Assets

Wall Street Journal
Oct. 17, 2015

Malaysia’s government investment fund has received three bids from domestic and international companies to buy its power assets, as the embattled state-run firm tries to dig itself out from its US$11 billion debt load.

In a statement late Friday, 1Malaysia Development Bhd., or 1MDB, said that it had received “binding and fully funded offers from three strategic investors.” 1MDB didn’t mention the names of the bidders for the assets, which are owned by a unit called Edra Global Energy Bhd.

Only one of the bidders publicly said it made an offer for the power assets. That bidder, another state-run power company called Tenaga Nasional Bhd., which is 30% owned by Malaysia’s sovereign-wealth fund Khazanah Nasional Bhd., said Friday that it had submitted a conditional offer.

Tenaga didn’t say what it bid for the assets, but added that its bid was subject to conditions that included support from its outside shareholders for any potential transaction and more information from 1MDB on the power plants’ operations. It wasn’t clear why Tenaga’s description of its offer as conditional appeared to contradict 1MDB’s characterization of all three offers as binding.

1MDB’s travails have put Malaysian Prime Minister Najib Razak in the spotlight, while hammering investor confidence in the commodities-exporting Southeast Asian nation at a time when it is suffering from fund outflows and falling oil prices.

Though the proposed sale of 1MDB’s power plants initially attracted several local and international players, the interest petered out. Read the rest of this entry »