<article>Independent power producer (IPP) <a href="http://www.malakoff.com.my" target="_blank">Malakoff Corp</a> Bhd’s re-listing may see the company sell MYR5.25 billion ($1.5 billion) worth of shares, having expanded its portfolio of power assets in the seven years since it was taken private.</article>

Independent power producer (IPP) <a href="http://www.malakoff.com.my" target="_blank">Malakoff Corp</a> Bhd’s re-listing may see the company sell MYR5.25 billion ($1.5 billion) worth of shares, having expanded its portfolio of power assets in the seven years since it was taken private.
Local media <a href="http://www.thestar.com.my/" target="_blank">The Star </a>reported that the IPP has expanded its stable of power generation assets in Malaysia and abroad, which will boost its listing exercise. It was <a href="http://www.dealstreetasia.com/stories/malakoff-to-re-list-submits-proposal-to-sc/" target="_blank">earlier expected to raise $1 billion</a>.
Analysts quoted an estimate of Malakoff’s breakup value as, MYR6.91 billion ($1.98 billion), or MYR1.38 per share based on a discounted cash flow valuation.
<a href="http://www.kenanga.com.my" target="_blank">Kenanga Research </a>commented that <a href="http://www.mmc.com.my/" target="_blank">MMC Corporation </a>Berhard (of which Malakoff is a subsidiary) would be able to raise proceeds of about MYR2.1 billion. Post-listing, MMC’s shareholdings will be diluted from 51 per cent to 37.8 per cent which, will result in MMC classifying Malakoff as an associate; and hence Malakoff’s balance sheet will be de-consolidated.
The relisting is expected to improve MMC’s balance sheet considerably, with the removal of Malakoff’s debts from its financials.
Kenanga Research was quoted: “We expect MMC’s net gearing ratio to improve from 2.06 times to 1.01 times. Earnings should increase by six  per cent to seven per cent as a result of interest savings after Malakoff’s listing.”
Another analyst noted: Assuming that MMC reduces its stake in Malakoff to 35 per cent (from 51 per cent), this could remove RM17bil of Malakoff’s debt from its balance sheet, reduce gross gearing to 0.7 times (from the current figure of 2.1 times).
Last month, parent company MMC announced that the proposed IPO would involve the sale of up to 1.52 billion shares, or 30.4 per cent of the enlarged paid-up share capital of the company at a price to be determined later.
The institutional offering for the IPO would involve up to 1.279 billion shares.
The IPO proceeds will largely go into paring down Malakoff’s debts.
In its filing yesterday, MMC said Malakoff would have greater financial flexibility to optimise its capital structure and cost of capital in pursuit of growth opportunities post-IPO.
Malakoff aims to increase total effective power generation capacity to 10,000 MW by 2020 and further diversify its assets portfolio by building a renewable power generation portfolio, both domestically and internationally, to contribute up to 15 per cent to its overall profit, MMC added.
Based on effective power generation capacity, the IPP is the largest in Malaysia as at June 30, with an effective capacity of 5,350 MW comprising six power plants that run on oil, coal and gas.
Malakoff also has the largest effective generation capacity installed in Southeast Asia.

Malakoff relisting may hit $1.5b, assets expanded

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Malakoff relisting may hit $1.5b, assets expanded

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