Edra Mulls IPO as $2.3 Billion Power Firm Seeks Life After 1MDBBy and
Edra is Malaysia’s second-biggest independent power producer
Deal could help Malaysian IPO volume rebound from 7-year low
Embattled state fund 1Malaysia Development Bhd. spent more than three years trying unsuccessfully to list its $2.3 billion power arm. Now the business’s new owner is hoping it will have better luck.
China General Nuclear Power Corp., the state-owned firm that bought Edra Global Energy Bhd. this year from 1MDB, is considering listing the electricity generator as early as 2017, people with knowledge of the matter said. A Malaysian initial public offering of Edra Global could raise as much as $400 million, said the people, who asked not be identified as the details are private.
Edra Global, based in Kuala Lumpur, is the second biggest independent power producer in Malaysia, trailing only Malakoff Corp. It has 13 electricity projects with a total installed capacity of 6,620 megawatts across Malaysia, Egypt, Bangladesh, the United Arab Emirates and Pakistan, according to CGN’s website. 1MDB had mooted the idea of an initial public offering of the business as early as 2012, people with knowledge of the matter said at the time.
1MDB said in January 2014 it was asking for bank pitches for the Edra Global listing, before postponing the offer later that year as it was sidetracked sorting out issues with the investment fund’s capital structure. The listing application was delayed a second time in 2015, as 1MDB was seeking a loan extension and trying to raise cash to repay mounting debt.
An Edra Global offering could help provide a boost to the Malaysian equity market after first-time share sales raised just $270 million this year, the lowest level for any comparable period since 2009, data compiled by Bloomberg show. The Southeast Asian nation forecasts its economy will expand as much as 5 percent in 2017, compared with 4 percent to 4.5 percent this year.
Plans for the listing of Edra Global are preliminary and details could change, the people said. A representative for CGN didn’t immediately respond to an e-mail seeking comment.
CGN agreed last year to pay 9.83 billion ringgit ($2.3 billion) to buy Edra Global from 1MDB, the Malaysian investment fund that is at the center of several international investigations into alleged corruption and money laundering. The transaction was completed earlier this year.
Malaysian developer Eco World International Bhd. said last week it plans to seek more than 2 billion ringgit in a domestic IPO. QSR Brands Bhd., which operates KFC and Pizza Hut restaurants in Southeast Asia, has picked banks to arrange a first-time share sale that could raise about $500 million, people with knowledge of the matter said this week.
— With assistance by Aibing Guo