Ministry of Finance appoints CIMB as adviser for Edra Global sale

PETALING JAYA: CIMB Group announced yesterday that it has been appointed to act as adviser to the Ministry of Finance (MoF) for the sale of 1Malaysia Development Bhd's (1MDB) power arm, Edra Global Energy Bhd to strategic investors.
CIMB said it received the letter of appointment yesterday, whereby its role will include "identifying potential buyers and running a competitive process for Edra to derive an optimal outcome for MoF."
CIMB's appointment came a day after Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said in Parliament that the government had asked the country's second largest banking group to be a third party to assist the evaluation of 1MDB's proposed initial public offering (IPO).
"This appointment does not extend to any other areas relating to the 1MDB Group," CIMB said.
On Wednesday, Ahmad Husni said CIMB would evaluate 1MDB's proposed IPO later this year to raise funds that would be used by 1MDB to finance loan interest payments and to settle principal loans
Apart from Ahmad Husni, others on the task force include Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar; Chief Secretary to the government Tan Sri Dr Ali Hamsa; and Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah.
This is besides the earlier task force announced by the Attorney-General (A-G) that will look into the fund's dealings following reports made against it.
1MDB had a balance sheet value of RM51.4 billion in current assets with loans amounting to RM41.9 billion, according to the firm's annual report.
1MDB was reportedly planning to list Edra Energy in a RM10.8 billion offering that would be Malaysia's biggest since Felda Global Ventures Holdings Bhd went public in 2012.
The IPO was scheduled to be in the first quarter of this year but 1MDB had to resubmit its application of Edra Energy to the Securities Commission Malaysia (SC) following the conclusion of its strategic review.
As a result of the review, 1MDB decided to convert its advance made to Edra Energy's operating subsidiary Powertek Investment Holdings Sdn Bhd into RM2 billion of equity.
Edra Energy is one of South East Asia's leading international independent power producers with a portfolio of 15 power and desalination plants in five countries with an effective power generation capacity of about 5,594MW.