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Malaysia 1MDB plans January meetings with cornerstones for $3 bln energy IPO-sources

KUALA LUMPUR: Heavily indebted 1Malaysia Development Bhd is planning meetings in January with potential cornerstone investors for the $3 billion IPO of its power business 1MDB Energy, said sources familiar with the matter.

The initial public offering is aimed at helping the state investor, known as 1MDB, reduce a debt burden that exceeds $11 billion. Plans for the sale had been delayed several times, bankers say, due to a longer-than-expected due diligence process and debt refinancing negotiations.

Raising $3 billion could place the 1MDB Energy IPO as Southeast Asia’s fifth-biggest listing ever, according to Thomson Reuters data.

“They are planning to go all the way out to even London and New York to meet investors,” said one of the sources on Wednesday, adding that there is no minimum investment threshold for cornerstones.

The investors that 1MDB plans to approach include Malaysia’s pilgrim fund and foreign investors such as Blackrock Inc , Aberdeen Asset Management and Abu Dhabi fund Mubadala, according to the sources.

1MDB officials declined to comment.

Almost half of the IPO offer will be allocated to institutional investors including cornerstones, the sources added.

“Book-building will come thereafter, in January or February,” one of the sources said.

The company has already hired Deutsche Bank and Maybank as joint global coordinators. Goldman Sachs is the main adviser for the IPO while Ambank and Maybank are also advising.

1MDB Energy owns a total of 16 power and desalination plants in Malaysia, Egypt, Sri Lanka, Bangladesh, Pakistan and the United Arab Emirates with a combined power generation capacity of 5,570 megawatts.

1MDB, a cross between a sovereign wealth fund and a private investment vehicle, is chaired by Prime Minister Najib Razak. -Reuters

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