EXCLUSIVE Malaysia’s Tenaga plans $1 bln IPO for power business, sources say

A view of Tenaga Nasional Berhad headquarters in Kuala Lumpur, Malaysia, October 13, 2015. REUTERS/Olivia Harris

SINGAPORE, Aug 12 (Reuters) – Malaysian electricity utility Tenaga Nasional Bhd (TENA.KL) plans to set begin the process next year for a potential $1 billion listing of its power generation business, sources close to the matter told Reuters.

In what would be the country’s largest initial public offering (IPO) in a decade, TNB Power Generation Sdn Bhd, known as TNB Genco, could be valued at about $4 billion, the sources said, declining to be named owing to the confidential nature of the matter.

Proceeds from the offering will be used to grow TNB Genco’s renewable energy portfolio, they added.

Tenaga, which counts Malaysia’s sovereign wealth fund Khazanah Nasional Bhd as its biggest shareholder, said the company has been exploring various initiatives to boost shareholder value, including a potential listing of TNB Genco.

However, Tenaga has not made a “definitive decision in relation to these potential initiatives” and is currently focused on improving operational performance, the company said in response to a Reuters request for comment.

TNB Genco’s IPO plan comes as Malaysia’s economy grew at its fastest annual pace in the second quarter, boosted by expansion in domestic demand and resilient exports. The economy has seen strong recovery since it reopened its borders in April.

Reporting by Yantoultra Ngui; editing by Sumeet Chatterjee, David Goodman and Jason Neely

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