1Malaysia Development Bhd hires advisors for IPO

Deutsche Bank and Goldman Sachs, as well as two local banks Maybank and AmBank are understood to be advising on the upcoming IPO of 1Malaysia Development's power assets, with the deal estimated to be worth more than $3 billion.

The state-backed investor said Thursday it had "commenced activities" to list on Bursa Malaysia in the fourth quarter of the year.

Baker & McKenzie is representing the Sovereign wealth fund 1Malaysia Development Bhd on the transaction, with its member firm in Malaysia, Wong & Partners, providing local law advice.

Linklaters is understood to be advising the banks. Kuala Lumpar-based outfit Adnan Sundra & Low is working together with Linklaters to provide Malaysian law counsel.

1Malaysia Development Bhd, a state-owned investment company, plans to list the assets on the Bursa Malaysia in the fourth quarter of 2014, and expects to use the proceeds to fund future business growth, for partial repayment of its outstanding debt and for general corporate purposes.

In Malaysia, the group is the second largest power producer in the country. In total it owns 16 power and desalination plants in six countries.

Analysts have doubts over 1MDB's ability to service its high debt, which stood at $11.6 billion by the end of March 2013.