Malaysia’s 1MDB Starts Work on $3 Billion IPO of Energy Assets

1Malaysia Development Bhd., the state investment fund, said it has started work on an initial public offering of its energy assets that is expected to raise more than $3 billion.

Deutsche Bank AG (DBK) and Malayan Banking Bhd. (MAY) will be the joint global coordinators for the IPO that is targeted for listing in the fourth quarter, the company said in an e-mailed statement yesterday. MayBank, AmBank M Bhd. and Goldman Sachs Group Inc. were appointed as advisers.

Proceeds will help 1MDB pare its 25 billion ringgit ($7.8 billion) of outstanding debt after buying energy assets from Malaysian billionaire T. Ananda Krishnan and Genting Bhd., according to data compiled by Bloomberg.

“1MDB expects to use the proceeds to fund future business growth, for partial repayment of its outstanding debt and general corporate purposes,” the company said.

1MDB, whose advisory board is headed by Prime Minister Najib Razak, has 3,080 megawatts of local generating capacity and 2,490MW overseas, its website shows. The fund won a bid in March to build an 11 billion ringgit, 2,000MW coal-fired power plant in Malaysia together with Japan’s Mitsui Co., according to its latest annual report.

To contact the reporter on this story: Elffie Chew in Kuala Lumpur at echew16@bloomberg.net

To contact the editors responsible for this story: Shamim Adam at sadam2@bloomberg.net Khalid Qayum

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