1MDB's Edra sale done?

KUALA  LUMPUR:  1Malaysia Development Bhd (1MDB) is close to the finalisation of the sale of its power unit Edra Global Energy Bhd and it is likely to a foreign bidder.

The stake being sold may be a majority one, with 1MDB remaing as a sizeable minority to ride on the future upside of Edra Global.

Edra Global has in its stable five domestic and eight international power plants.

Three parties are the finalists in the bidding process for Edra Global, with Tenaga Nasional Bhd being the only local party.

StarBizWeek had previously made the point that the sale of Edra should go to the highest and most attractive bid, irrespective of whether that may be from a foreign party.

If the foreigners are prepared to pay a handsome sum for Edra’s assets in the process, so be it. The power plants cannot be uprooted and taken away.

What is important is that an efficient and transparent price discovery method – such as a competitive bidding process – is used to determine Edra Global’s asset.

It has been reported that 1MDB was weighing various criteria in its selection process such as pricing, the terms proposed by the bidder and how fast and efficiently can the transaction be executed.

1MDB is due to hold a press conference on Saturday, the first since the controversy over of its RM42bil debt came about more than a year ago. Perhaps there would be more details coming out on the sale of Edra Global.

The sale of Edra Global power assets, valued at RM18bil in 1MDB’s books, is part of the latter’s rationalisation plan to reduce its debts of close to RM42bil.
 
1MDB had paid RM12bil for the equity of the power assets under Edra and assumed debt worth RM6bil when it completed the purchase of the power assets. It was reported that 1MDB did not put a reserve price on Edra, but had hoped to sell the energy assets at a price close to its book value.