1Malaysia Development Bhd's (1MDB) energy arm, Edra Global Energy Bhd, is disposing of all its assets to China General Nuclear Power Corp and its units (CGN group) for RM9.83 billion, making it the largest merger and acquisition deal in the Asian power sector year to-date.
The transaction, which is expected to be completed in February 2016 is also a major milestone in the 1MDB rationalisation plan, as presented to the Malaysian Cabinet on May 29, 2015.
"CGN Group was a clear winner in this international tender, based on the objectives announced by 1MDB previously, namely, value maximisation, acceptable commercial terms and certainty of transaction execution," said 1MDB's President & Group Executive Director, Arul Kanda, in the joint statement today.
The purchase by CGN Group brings a significant foreign direct investment commitment to Malaysia and a clear vote of confidence in the economy, he said.
1MDB, Edra and its subsidiries have executed share sale and purchase agreements with CGN Group for the 100 per cent sale of 1MDB’s ultimate ownership in all its energy assets, namely, Edra Solar Sdn Bhd, Edra Energy Sdn Bhd, Powertek Energy Sdn Bhd, Jimah Teknik Sdn Bhd, Jimah O&M Sdn Bhd, Mastika Lagenda Sdn Bhd and Tiara Tanah Sdn Bhd (Edra operating companies).
CGN Group will pay, in cash, an equity value of RM9.83 billion and will assume all the relevant gross debt and cash of the Edra operating companies, based on a valuation date as at March 31, 2015.
The statement said indicative offers for the Edra operating companies were first received in June 2015 via a rigorous, competitive and international tender process run by 1MDB’s financial adviser, Maybank Investment Bank Bhd.
Rothschild acted as financial adviser to Edra.
"This investment represents a major commitment by CGN Group as part of a long-term, global diversification initiative," its Board Chairman He Yu said.
He said the group was extremely impressed by the highly regulated, stable and transparent independent power producer framework in Malaysia, which has given the firm the confidence to make a long-term investment to the country.
"The CGN Group is a responsible and involved investor. We will work closely with Edra, a Malaysian-based and Malaysian run global platform, and together, will take it to the next level," he said.
Most important of all, CGN Group will ensure uninterrupted power supply, using environmentally-friendly technologies and adhere to the fixed terms of the respective power purchase agreements, for the benefit of the people of Malaysia, he said.
Bernama
Mon Nov 23 2015
The transaction, which is expected to be completed in February 2016 is also a major milestone in the 1MDB rationalisation plan, as presented to the Malaysian Cabinet on May 29, 2015. - Filepic
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