Ananda Krishnan mulls sale of Measat

February 29, 2012

KUALA LUMPUR, Feb 29 — Tycoon T. Ananda Krishnan plans to dispose of his stake in satellite operator Measat Global as part of asset sales that could raise around US$3.5 billion (RM10.5 billion), Singapore’s Straits Times newspaper reported today.

Citing a banking source, the newspaper reported that talks about a sale in Measat started in late 2011.

The source added that the sale could involve Saudi satellite firm Arabsat taking a strategic or even majority stake in the Malaysian satellite firm.

However, the Straits Times reported that control of Measat by Arabsat could be difficult as Malaysia has a 40 per cent cap on foreign ownership of strategic domestic assets.

The report comes shortly after Ananda Krishnan (picture) put his entire power portfolio up for sale, with Standard Chartered hired to manage the transaction of about a dozen power plants, according to Reuters reports.

The deal has so far attracted 12 bids, The Star newspaper reported on Saturday, with Saudi Water & Electricity Co submitting the top bid of RM10.85 billion.

According to previous Reuters reports, Ananda Krishnan maintains a low profile and little is known about his private life. It was not immediately clear why he was putting up the assets for sale.

His executives have launched a number of corporate deals in recent years, relisting part of his Maxis Bhd telecommunications services provider in what was Southeast Asia’s biggest initial public offering in 2009. Last year, his team relisted Malaysian oil and gas services provider Bumi Armada Bhd.

Krishnan has also privatised Malaysian pay-TV monopoly Astro All Asia Networks Plc after a money-losing expansion into Indonesia and India weighed on the company’s finances.

The tycoon’s Tanjong Energy has three gas-fired power plants in Malaysia with combined capacity of 1,490 MW.

The sale of power assets could attract Malaysian power companies as well as regional power investment firms from the Middle East, the sources said.

They said most of the power plants being sold by Tanjong held long-term power purchase agreements (PPAs), which provided extended profit guarantees for the projects, and hence could attract buyers.

But the PPAs for the power plants are expiring in several years and face renewal with state utility Tenaga Nasional Bhd, which posted a third consecutive quarterly loss in January, one source said.

“Negotiations with Tenaga could be tough when the current contracts expire,” a source said, adding the Egypt asset could also be a hard sell given the recent political turmoil in the North African country.