The Ministry of Finance Malaysia (MoF) has called off plans to sell 1Malaysia Development Bhd’s (1MDB) energy unit, and will return to its original plan to list Edra Global Energy Bhd in an initial public offering on the Malaysian stock market.
This decision comes a week after the MoF appointed CIMB Group Holdings to act as adviser for the “competitive” sale of Edra to strategic investors.
The banking group said in a statement that “CIMB has been informed by the Ministry of Finance that the MoF has decided not to consider a sale of Edra to strategic investors and as such, CIMB’s services as adviser to the potential sale are no longer required”.
CIMB was initially appointed to identify potential buyers and run a competitive bidding for Edra.
In a separate statement, the finance ministry said Edra is proceeding with plans to submit an application to list on the Malaysian stock exchange.
State investment firm 1MDB is preparing to re-submit an application by May for an IPO of Edra that could raise as much as $3 billion.
1MDB, whose advisory board is headed by Prime Minister Datuk Seri Najib Razak, announced plans in February to dismantle its assets after it drew criticism from lawmakers for rising borrowings that totalled MYR41.9 billion as of March 2014.
Its ability to service its debt was put in question after it delayed payment of a loan of MYR2 billion by about three months.