1MDB may scrap plans for US$3b IPO of power unit

Kuala Lumpur

MALAYSIAN state investment fund 1MDB is likely to abort plans for a US$3 billion IPO of its power unit and focus on an outright sale of its energy assets, three people with direct knowledge of the deal said on Tuesday.

The gloom surrounding the Malaysian economy may limit appetite for an IPO for Edra Global Energy, which could have been South-east Asia's fifth-biggest, and several foreign firms have expressed interest in a direct purchase of the assets. "Market sentiment is still weak," one of the sources said."It's much better to sell it off directly, or even better if they split up the assets into two or three chunks and sell it off." The sources said there had been no formal talks with any interested party yet. "The government is likely to invite a few bidders, who they have selected, to bid for the assets sometime in late July," one of the sources told Reuters.