1MDB buys over A.K’S power assets

PETALING JAYA: The power assets of billionaire T. Ananda Krishnan have been sold to 1Malaysia Development Bhd ( 1MDB) – the biggest power aasset sale in the country, and probably bprobably in the region.

Sources familiar with the deal said tthe parties had signed the sale and purchase agreement last Friday but they could not reveal the price.

However, they indicated that it wwas in the range of between Us$3.2bil (Rm9.92bil) and Us$3.6bil (Rm11.16bil).

Last month, Ananda had put up for sale all his power assets held via Tanjong Energy Group, which owns and operates eight power plants with investments in five power plants in malaysia, Egypt, Bangladesh, Pakistan, Sri Lanka and the United Arab Emirates.

Together, they have a total net generating capacity of 3,951MW.

The sale had attracted 12 local and international bidders.

It is not clear as to why Ananda is selling his power assets, but 1MDB sees power as a strategic sector to ensure sustainable long-term earnings growth. There would be a need to invest and expand as well.

More importantly, the sale of the power assets to a Malaysian company ensures that control remains within the country, given that power is a strategic sector and the security and reliability of power supply for long-term economic development is critical.