Bloomberg News

1MDB Boosts Malaysia Power Assets Spending Spree to $3.8 Billion

July 05, 2013

1Malaysia Development Bhd., the state investment fund known as 1MDB, agreed to buy a controlling stake in a coal-fired power plant, pushing its recent spending bill on energy assets to 12 billion ringgit ($3.8 billion).

The Kuala Lumpur-based sovereign wealth fund agreed to pay 1.2 billion ringgit for an effective 75 percent stake in the 1,400 megawatt Jimah coal-fired power in Malaysia’s Negeri Sembilan state, according to a statement posted on its website. This is 1MDB’s third such acquisition in 16 months as it builds a portfolio of Malaysian power assets from scratch.

1MDB plans to undertake an initial public offering for the energy business to pare borrowings, a person familiar with the matter said in August. The company, which is also developing an $8 billion financial district in Kuala Lumpur, had total debt of 30.7 billion ringgit before this acquisition, according to data compiled by Bloomberg.

“The acquisition diversifies 1MDB’s energy generation capacity,” the investment company said in the statement. The deal enhances “potential for further development opportunities in the sector.”

The fund purchased billionaire T. Ananda Krishnan’s electricity power generation business for 8.5 billion ringgit in March last year, and Genting Bhd.’s domestic energy operations for 2.3 billion ringgit in August.

The Jimah power plant transaction is subject to financing and regulatory approval, it said.

To contact the reporter on this story: Elffie Chew in Kuala Lumpur at echew16@bloomberg.net

To contact the editor responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net;


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