1Malaysia Development Berhad’s (1MDB) sale of its power assets, parked under Edra Global Energy, is well underway, local media reported citing sources. The deadline for final bids by the four short-listed candidates has been set for the middle of this month.

It was reported early last week that the short-listed candidates were Qatar’s Nebras Power QSC, Hong Kong-listed CGN Meiya Power Holdings Co Ltd and Saudi Arabia-based ACWA Power International. Tenaga Nasional Berhad is the sole party from the domestic market which has shown interest.

However, of those four candidates, one has pulled out of the bidding while the other noted that it was not invited to bid.

CGN Meiya Power Holdings has decided not to bid. It announced its board decision to abort the acquisition plan on the Hong Kong Stock Exchange on Friday, one week before the October 16 deadline for the final bid submission.

In the announcement to the stock exchange, the China-based energy group said, “the board considered that it would not be in the best interest of the company to pursue the proposed acquisition [of 1MDB’s power assets] because, among others, the company has only recently completed the acquisition of 19 wind and solar power projects with a total attributable installed capacity of approximately 1.4gw from certain subsidiaries of its controlling shareholder, China General Nuclear Power Corp Ltd (CGN Power Corp).”

CGN Meiya announced that it was a contender for Edra Energy’s assets less than a month ago.

ACWA announced in late-September that it was not invited by 1MDB to make any final offer.

The other two candidates then, StarBiz reported, are another Saudi Arabia-based company and CGN’s parent company, state-owned China General Nuclear Power Corp Ltd, seeking to participate in the bid for Edra.

The sale of Edra Global power assets is part of 1MDB’s rationalisation plan to reduce its debts of close to MYR42 billion.

On September 7, 1MDB said it shortlisted four parties for the final bidding stage for the sale of Edra Global but did not disclose the names.

Edra Global has five domestic and eight international power plants with total generation capacity of some 5,500MW. The assets are valued at MYR18 billion in its books.

In July, TNB bought Edra Global’s 70 per cent stake in Project 3B or a 2,000MW coal-fired plant in Jimah, Negri Sembilan, for MYR46.98 million.

Under prevailing regulations, foreign bidders are restricted from owning more than 49 per cent of power plants in Malaysia. This is a practice that has already been adopted by the Energy Commission (EC) when it put up the power plant projects for a competitive-bidding process.

The sale of Edra’s assets could be the first to see foreign ownership exceeding the cap of 49 per cent, StarBiz reported.

The EC says foreign shareholdings in Malaysian power plants do not fall under its jurisdiction and is determined somewhere else at the government level.

Earlier this year, 1MDB withdrew its submission seeking a listing of Edra after failing to meet Securities Commission requirements in the first week of March.

Late March, the Finance Ministry appointed CIMB Group for the sale of Edra, but the mandate was relinquished a week later.

Since then, 1MDB has been looking at a sale of Edra and is said to have hired Maybank Investment Bank Berhad for the international sale process.

Also read:

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Malaysia’s 1MDB targets energy assets sale at $3.4b-$4.6b: Report

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