<article>State investment vehicle<a style="color: #000080;" href="http://www.1mdb.com.my/" target="_blank"> 1Malaysia Development Bhd</a> (1MDB) has cancelled plans to sell up to MYR 8.4 billion ($2.4 billion) of Islamic bonds.</article>

State investment vehicle<a style="color: #000080;" href="http://www.1mdb.com.my/" target="_blank"> 1Malaysia Development Bhd</a> (1MDB) has cancelled plans to sell up to MYR 8.4 billion ($2.4 billion) of Islamic bonds.
Reuters reported that the Islamic bond or sukuk had been earmarked to raise funds for the construction of a $3.6 billion green field 2,000 megawatt coal-fired power plant, known as 3B, in the state of Negeri Sembilan.
The news wire quoted a banker familiar with the deal, saying that the sukuk issue “has been called off&#8230;they are not moving ahead with the exercise anymore”.
If the sukuk issue had gone ahead in December, as earlier planned, it would have been the biggest Islamic bond deal of 2014.
1MDB is also expected to withdraw from the <a style="color: #000080;" href="http://www.thestar.com.my/Business/Business-News/2014/03/01/1MDB-awarded-Project-3B-YTL-loses-out-in-bid-for-2000-MW-power-plant/?style=biz" target="_blank">3B power project</a> and an announcement would be made soon, according to another source quoted by Reuters.
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Malaysian media had reported on Saturday that 1MDB may pull out, thereby allowing Malaysia&#8217;s largest power group <a style="color: #000080;" href="http://www.tnb.com.my/" target="_blank">Tenaga Nasional Bhd</a> to take over the project.
1MDB declined to comment on either its sukuk plans or the power project while a spokesman for Tenaga Nasional Bhd said the company was unaware of such reports.
1MDB partnered with <a style="color: #000080;" href="https://www.mitsui.com/jp/en/index.html" target="_blank">Mitsui &amp; Co Ltd</a> to win the bid for Project 3B in February last year, beating <a style="color: #000080;" href="http://www.ytlpowerinternational.com/" target="_blank">YTL Power International</a>, Tenaga Nasional Bhd and <a style="color: #000080;" href="http://www.malakoff.com.my/" target="_blank">Malakoff Corp Bhd</a>. The greenfield power plant was expected to start operations in 2018 and run for 25 years, but has been hit with delays.
The Malaysian fund, which owns 16 power and desalination plants in six countries, has been embroiled in controversy over its nearly $12 billion debt pile and criticised for a perceived lack of transparency.
The loss of the power project may further dampen investor interest in 1MDB&#8217;s planned $3 billion power IPO, which is expected later this year.
The company hired Malaysian investment banker <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/1mdb-ceo-resigns-abu-dhabi-banker-takes-helm-1800/" target="_blank">Arul Kanda</a> as its new president last month who has embarked on a strategic review of the firm&#8217;s operations.
It may also look at selling some property assets as part of its new CEO&#8217;s plan to overhaul the company, the report said.
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State investment vehicle 1Malaysia Development Bhd (1MDB) has cancelled plans to sell up to MYR 8.4 billion ($2.4 billion) of Islamic bonds.

1MDB calls off $2.4b Islamic bond issue

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