Edra Global power asset sale going ahead as scheduled

  • Business
  • Saturday, 10 Oct 2015

THE sale of Edra Global Energy Bhd’s power assets is going ahead according to plan, sources say, with the deadline for final bids by the four short-listed candidates set for the middle of this month.

It was reportedthat the short-listed candidates were Qatar’s Nebras Power QSC, Hong Kong-listed CGN Meiya Power Holdings Co and Saudi Arabia-based ACWA Power International, Tenaga Nasional Bhd is the sole party from the domestic market being interested.

However, sources say that ACWA Power and CGN Meiya are not in that final list.

ACWA announced in late-September that it was not invited by 1Malaysia Development Bhd (1MDB) to make any final offer while CGN Meiya, listed on the Hong Kong Stock Exchange, said on Oct 9 it would not proceed with the proposed acquisition as it would not be in the best interest of the company.

But sources say that it is another Saudi Arabia-based company that is seeking to participate in the bid for Edra and not ACWA, and that it is CGN’s parent company which is one of the last four.

CGN’s parent company is state-owned China General Nuclear Power Corp Ltd.

The sale of Edra Global power assets, valued at RM18bil in its books, is part of 1MDB’s rationalisation plan to reduce its debts of close to RM42bil.

On Sept 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.

In July, TNB bought Edra Global’s 70% stake in Project 3B or a 2,000MW coal-fired plant in Jimah, Negri Sembilan, for RM46.98mil.

Under prevailing regulations, foreign bidders are restricted from owning more than 49% 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 Global could be the first to see foreign ownership exceeding the cap of 49%.

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

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

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

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

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