Tenaga plans RM10b Sukuk after power plant buy

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KUALA LUMPUR: Tenaga Nasional Bhd plans to raise as much as RM10bil (US$2.7bil) in an Islamic bond issue, sources familiar with the matter said – a move that comes after it agreed to buy debt-laden 1MDB’s majority stake in a power plant project.

Plans for the bond issue, which would be the largest sukuk globally of 2015, are still preliminary, two sources said.

Tenaga, Malaysia’s national utility in which state investor Khazanah is the biggest shareholder, is planning a single issue bond rather than a series and has approached several banks to court proposals, one of the sources said.

The sources declined to be identified as discussions about the bond proposal were confidential. A spokesman for Tenaga declined to comment.

This month Tenaga agreed to take over state development fund 1MDB’s 70 percent stake in 3B, a greenfield 2,000 MW coal-fired plant project, for a sum yet to be determined – a sale that will help 1MDB pare down debt of more than US$11bil.

Tenaga’s shares initially slid as much as 7 percent on news of the purchase but have since regained most ground lost.

The 3B project had been the crown jewel in 1MDB’s portfolio of power plants but had stalled due to its cash flow problems. – Reuters

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