Malaysian state fund 1Malaysia Development (1MDB) has agreed to sell its energy assets to China General Nuclear Power Corporation (CGN Group) for 9.83 billion ringgit (US$2.3 billion).
“This investment represents a major commitment by the CGN Group as part of a long-term, global diversification initiative,” says He Yu, chairman of the board at CGN group. “We will work closely with Edra, a Malaysian-based and Malaysian-run global platform, and together, will take it to the next level.”
Under the scheme, CGN will assume all gross debt and cash of Edra Global Energy. The deal is expected to be completed around February 2016. “I am proud that the value created in our operating assets has been recognized by the CGN Group,” states Dato’ Mark Ling, president and executive director at Edra.
Maybank Investment Bank advised 1MDB on the transaction, while Rothschild and HSBC acted as financial advisers to Edra and CGN, respectfully on the share sale and purchase agreement.
The transaction highlights the latest deal from the controversial 1MDB fund, which is being investigated by regulators after it was reported that money, under the watch of Malaysia’s Prime Minister Najib Razak who also heads the advisory board for the fund, went missing. In an attempt to appease lawmakers in the country, Prime Minister Najib has made it a priority to dismantle assets currently in the fund.
Just this summer 1MDB agreed to sell its Jimah East Power plant to Tenaga Nasional the largest power company in Southeast Asia for US$12.45 billion. Other dealings of the fund in 2015, according to data provider S&P Capital IQ, show the sale of property in Kuala Lumpur.