Acwa Power International, the Saudi power developer, and San Miguel Corp. are among parties that have expressed interest in 1Malaysia Development Bhd.’s energy assets, people with knowledge of the matter said.
The companies have indicated they may bid for power plants owned by the state investment fund if they become available, the people said, asking not to be named as the information is private. 1MDB’s energy assets could be valued at at least 8 billion ringgit ($2.2 billion) in a sale, the people said.
1MDB hasn’t asked for any offers and no official discussions on a sale have started, they said. The foreign suitors may explore joint bids with a local company such as Tenaga Nasional Bhd., the power producer controlled by Malaysia’s sovereign fund, two of the people said.
Malaysia said in April it scrapped a plan to find a buyer for 1MDB’s power unit Edra Global Energy Bhd. and will focus on an initial public offering of the business. While work on the IPO continues, a sale could be a quicker way for 1MDB to raise funds to repay debt, two people said.
Sembcorp Industries Ltd. said Thursday in Singapore that Edra is one of many opportunities the company is looking at as part of its business development. Discussions are “very preliminary,” it said in an e-mailed statement to Bloomberg.
1MDB owns net generation capacity of 5,594 megawatts and is the largest independent power producer in Bangladesh and Egypt, according to information on its website. It has 3,112 megawatts 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.
A spokesman for 1MDB declined to comment, while a representative for Acwa didn’t immediately respond to requests for comment outside regular business hours in Saudi Arabia. San Miguel President Ramon Ang said by mobile-phone text message the company will look at 1MDB’s energy assets if they are offered to the Philippine firm. Fazlur Rahman Zainuddin, Tenaga Nasional’s chief financial officer, said the company evaluates opportunities that would add value to its business.
1MDB, whose advisory board is headed by Prime Minister Najib Razak, announced plans in February to dismantle its assets after it drew criticism from lawmakers for rising borrowings that totaled 41.9 billion ringgit as of March 2014.
Acwa Power, based in Riyadh, has developed and invested in power plants that can generate 15,731 megawatts, according to its website.
San Miguel, the biggest and most acquisitive Philippine company, is selling a bank after disposing its shares in Philippine Airlines Inc. as it focuses on its core energy and food businesses. The company is the nation’s largest power generator, accounting for about a fifth of capacity, and owns its largest oil refiner.