Sources say that only Malaysia Tenga is planning a $1 billion IPO for the energy business

A view of Tenaga Nasional Berhad’s headquarters in Kuala Lumpur, Malaysia, 13 October 2015. REUTERS/Olivia Harris

SINGAPORE, Aug 12 (Reuters) – Malaysian electricity utility Tenaga Nasional Bhd (TENA.KL) plans to launch a potential $1 billion takeover of its power generation business next year, sources close to the matter told Reuters.

TNB Genco, also known as TNB Power Generation Sdn Bhd, could be valued at US$4 billion in the country’s biggest initial public offering (IPO) in a decade, the sources said, declining to be named due to its confidential nature. The case.

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

Tenga, which counts Malaysian sovereign wealth fund Khazanah Nasional Bhd as its largest shareholder, said the company has been looking for various initiatives to boost shareholder value, including the listing of TNB Genco.

However, Tenaga has not made a definitive decision on these potential initiatives and is currently focused on improving its operational performance, the company said in a statement to Reuters.

TNB Genco’s IPO plan comes as Malaysia’s economy grew at its fastest annual pace in the second quarter, buoyed by expanding domestic demand and strong exports. After reopening the border in April, the economy has shown a strong recovery.

Reporting by Yantoultra Ngui; Editing by Sumeet Chatterjee, David Goodman and Jason Neely

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