State investment vehicle 1Malaysia Development Bhd (1MDB) has shortlisted a select group of potential local and international strategic investors, who will carry out due diligence inquiries into its power asset unit, Edra Global Energy Bhd.
1MDB is confident that a definitive agreement with the chosen party can be entered into by the fourth quarter (Q4) of 2015, with completion to take place soon after relevant conditions precedent are fulfilled.
The fund is seeking the monetisation of its investment in Edra after its earlier plans of an initial public offering fell through in June. The fund emphasised that it remained focused on a rationalisation plan despite allegations from opposition politicians and former leaders of mismanagement of its funds.
“1MDB has since shortlisted a select group of potential parties, comprising both local and international strategic investors, to progress their detailed due diligence inquiries into Edra which houses our power assets.”
“The due diligence exercise will entail, among others, discussions with management, access to data room and site visits, designed to facilitate the potential investors’ review of Edra,” it said in a statement today.
As previously highlighted, the Board of Directors of 1MDB will be guided by, among other things, value maximisation to 1MDB’s shareholders, deal certainty, and terms that are fair and reasonable, the statement read.
In July, national power producer Tenaga Nasional Bhd submitted an indicative non-binding proposal to acquire the five domestic and eight international power assets of Edra. It was reported that YTL Power International Bhd is also eyeing the power assets in Edra.