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Thursday, January 15, 2015

Ananda Krishnan in talks to take key stake in 1MDB IPO

Tycoon Ananda Krishnan is in talks with 1MDB to become an investor in the listing of its power assets. – File pic, January 15, 2015. Tycoon Ananda Krishnan is in talks with 1MDB to become an investor in the listing of its power assets. – File pic, January 15, 2015.Malaysia's second-richest man, Ananda Krishnan, is in talks with state firm 1MDB to become a cornerstone investor in a long-delayed, US$3 billion (RM10.7 billion) listing of its power assets, two people familiar with the matter said on Thursday.
The reclusive billionaire, who owns holdings in many of Malaysia's biggest listed firms, is considering taking at least a 5% stake in 1MDB's energy business, one of the people said. The people didn't disclose how much Krishnan's stake would be worth since talks on the matter are continuing.
An investment by Krishnan would be a major boost for cash-strapped 1MDB, both in funding and inspiring confidence among other potential initial public offering investors. With Prime Minister Najib Razak chairing its advisory board and criticism of 1MDB's strategy mounting, the firm needs funds from the IPO to cut a debt pile of nearly US$12 billion (RM42.7 billion) and to expand business.
"Both parties (Krishnan and 1MDB) are now working on the terms," one of the people said, declining to be named as the matter was private. The IPO is now likely to take place in the second quarter of this year, according to one person involved in the deal.
Proceeds from Krishnan's investment could be used to repay the bridge loan. The loan is owed to the country's largest bank, Malayan Banking Bhd, and smaller lender RHB Capital Bhd, and was guaranteed by Krishnan's investment vehicle Usaha Tegas, according to the people familiar with the talks.
The loan guarantee came as part of a transaction Krishnan struck with 1MDB in 2012, when the 76-year-old tycoon sold his power company Tanjung Energy to 1MDB for US$2.8 billion (RM9.9 billion).
"They are almost there in terms of a deal," said one person familiar with the discussions, saying that an agreement would be reached by the end of the month.
1MDB officials declined to comment. Usaha Tegas officials were not immediately available to comment.
Krishnan, estimated by Forbes magazine to have a net worth of US$9.7 billion (RM34.5 billion) as of this month, is renowned for maximising value for his assets, especially through IPOs. He also has a track record of running profitable power operations through his company Tanjong Plc.
In 2012 Krishnan relisted his pay-TV firm, Astro Holdings Malaysia Bhd, in a deal worth RM5.3 billion, valuing the whole company at some RM15.6 billion. He had taken Astro private just two years before when it was valued at RM8.3 billion. – Reuters

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