KUALA LUMPUR (Reuters) - Malaysia's state electricity utility, Tenaga Nasional Bhd, said on Friday it has submitted a conditional offer to buy the power unit of debt-laden 1Malaysia Development Bhd (1MDB), without disclosing the sum offered.
1MDB has been the subject of multiple investigations amid allegations of financial mismanagement and graft, creating a political crisis for Prime Minister Najib Razak who chairs its advisory board.
The firm is seeking to pare back $11 billion in debt and the power unit Edra Global Energy Bhd is widely viewed as its best asset.
"As the country's largest power producer, no other bidder knows these assets better than Tenaga Nasional," its president and chief executive officer Azman Mohd said in a local stock exchange filing.
"Given our world-class track record in power generation and excellence in facilities management, the addition of these assets will unlock new value in Tenaga Nasional and will enhance future growth," he added.
The conditional offer includes Tenaga finalising the confirmatory due diligence process, finalising and executing the share purchase agreement, and 1MDB providing further information on operations, the company said.
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The company also needs its shareholders' approval and there's no assurance the deal will be concluded, the filing said.
1MDB said in a separate statement that it had received "final, binding and fully funded offers" from three investors, comprising both domestic and international parties. It did not name the bidders.
"We expect to enter into a definitive agreement with the chosen party shortly after the evaluation and negotiation process has been completed, before the end of 2015," the statement said.
People familiar with the matter had told Reuters Tenaga was one of four suitors shortlisted for the final round of bidding. Tenaga was seen as the most likely bidder after Hong Kong listed CGN Meiya Power Holdings Co recently dropped out of the race.
Tenaga is the largest power company in Southeast Asia with a market value of $17.3 billion. Malaysian sovereign fund Khazanah holds a 30 percent stake in it.
1MDB is the largest independent power producer in Bangladesh and Egypt and the second biggest in Malaysia after Malakoff Corp Bhd. It also holds assets in the United Arab Emirates and Pakistan through joint ventures.
Shares of Tenaga ended 0.16 percent higher at 12.80 ringgit apiece on Friday, prior to the announcement. The benchmark stock index rose 0.21 percent.
For the full statement, please click: https://bsmedia.business-standard.combit.ly/1Kd3aDW
($1 = 4.1700 ringgit)
(Reporting by Yantoultra Ngui and Praveen Menon; Editing by Mark Potter and Jane Merriman)