by BLOOMBERG / graphic by MZUKRI MOHAMAD

SINGAPORE • Tenaga Nasional Bhd (TNB), Malaysia’s state-owned electricity company, is considering listing its power generation business on the local stock exchange next year following a corporate reorganisation, according to people familiar with the matter.

The power company is working with an advisor on its planned restructuring, and aims to finish the process as soon as the first half of next year, the people said.

Upon completion, the plan is for a listing by introduction of the generation business, where investors would be given shares in the unit in proportion to their existing holdings in TNB, the people said.

Deliberations are at an early stage and there is no certainty the deal will proceed, said the people, asking not to be identified as the process is private.

A representative for TNB said the company is not working on any groundwork for a listing, as its current focus is to drive operational efficiency for the generation unit.

TNB counts state-owned sovereign wealth fund Khazanah Nasional Bhd and pension fund the Employees Provident Fund among its largest owners.

The power utility won approval from shareholders in a special meeting in February to reorganise its power generation and distribution businesses into separate holding companies, according to a stock exchange filing.

The move is aimed at preparing for upcoming reforms in the electricity supply industry in Malaysia, the company said in a statement. The power generation unit’s Ebit in 2018 was RM1.6 billion, according to the statement. It is targeting RM2.6 billion in 2025.

The power company would be following Malaysian conglomerate Sime Darby Bhd, which listed its property and plantation units by introduction in 2017.

TNB, which has a market value of nearly RM58 billion, owns 47 plants in Peninsular Malaysia with a total domestic generating capacity of 10,617MW, according to its 2019 annual report.

It also has a presence in the UK, Kuwait, Turkey, Saudi Arabia, Pakistan, India and Indonesia.