IPO ... 1MDB - Power assets.

1Malaysia Development Bhd, the state investment company known as 1MDB, plans to raise as much as US$2 billion in an initial public offering of its power assets.

The IPO may take place in the first quarter of 2013.

1MDB has spent about RM10.8 billion (US$3.5 billion) purchasing electricity generation plants.

Proceeds from 1MDB’s offering would be used to repay debt. The company, which is developing an US$8 billion financial district in Kuala Lumpur, has total debt of RM20.7 billion.

1MDB agreed in March 2012 to buy billionaire T. Ananda Krishnan’s power interests for RM8.5 billion. This included generating plants in countries including Malaysia, Egypt, Pakistan and the United Arab Emirates.

In Aug 2012 1MDB agreed to purchase Genting Bhd’s domestic power-generation business for RM2.3 billion, including its interests in a 720-megawatt plant in Kuala Langat, Selangor.

Energy is one of the group’s core areas of focus when it announced the acquisition of Ananda Krishnan’s power plants.