EXCLUSIVE-Malaysia’s Tenaga plans $1 billion IPO for power sector, sources say

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SINGAPORE, August 12 (Reuters)Malaysian Electricity Company Tenaga Nasional Bhd TENA.KL plans to start the process next year for a potential $1 billion listing of its power generation business, sources familiar with the matter told Reuters.

In what would be the country’s largest initial public offering (IPO) in a decade, TNB Power Generation Sdn Bhd, known as TNB Genco, could be valued at around $4 billion, the sources said, declining to comment. be named due to the confidential nature of the matter.

Proceeds from the offering will be used to expand TNB Genco’s renewable energy portfolio, they added.

Tenaga, which counts Malaysian sovereign wealth fund Khazanah Nasional Bhd as its largest shareholder, said the company was exploring various initiatives to increase shareholder value, including a possible listing of TNB Genco.

However, Tenaga has not made a “final decision on these potential initiatives” and is currently focused on improving operational performance, the company said in response to a Reuters request for comment.

TNB Genco’s IPO plan comes as Malaysia’s economy grew at its fastest annual pace in the second quarter, boosted by expanding domestic demand and resilient exports. The economy has seen a strong recovery since the reopening of its borders in April.

(Reporting by Yantoultra Ngui; editing by Sumeet Chatterjee, David Goodman and Jason Neely)

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