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The billion-dollar question [Malaysian Business (Malaysia)](Malaysian Business (Malaysia) Via Acquire Media NewsEdge) Just why is T Ananda Krishnan, Malaysia's second richest man, selling his prized assets? Why is T Ananda Krishnan, Malaysia's second richest man, selling his prized assets? That's the billion-dollar question that many quarters are trying to figure out. To recap, media reports recently stated that Ananda has hired advisors to find buyers for his power and satellite assets, which are held via Tanjung plc and Measat Global Bhd respectively. These assets combined could easily fetch more than US$ 3.5 billion, according to some reports. So far, there isn't any official statement from him or his key lieutenants. According to news reports, a number of buyers had reportedly shown interest in Ananda's power portfolio, including 1Malaysia Development Bhd (1MDB), and CIMB/Employees' Provident Fund (which had submitted a joint bid) and Saudi Water & Electricity Co, which had apparently offered the highest bid at RM10.85 billion. On March 7, it was reported that 1MDB had acquired Ananda's power portfolio for RM8.5 billion. This development is not altogether surprising as power is seen as a strategic sector. In the case of Measat, there has been talk that Saudi satellite firm, Arabsat, is looking to take up a strategic or majority stake in the Malaysian satellite firm. Ananda's mega asset sale has got many puzzled, even his closest followers. When Ananda sold off Tanjung's gaming asset in Sept 2011, those close to him said that he had made a `philosophical decision; to cease any involvement in what is seen as a `sin' sector. Instead, Ananda was said to be keen on putting his money into the power business, especially in developing countries, because of the developmental aspects of the power sector. It has been widely speculated that he wants to bring back his power assets into the capital market via a relisting of Tanjung, which he had taken private some 19 months ago, together with Measat and pay-TV monopoly operator, Astro All-Asia Networks. At this price, Ananda would be, in less than two years, making a gain of more than RM1.8 billion from selling Tanjung's power and gaming assets. Ananda had sold Tanjung's numbers forecast operator - Pan Malaysia Pools Sdn Bhd - for a reported sum of RM2.1 billion to a group of businessmen in 2011. At a combined value of RM10.6 billion (for the two prized assets of Tanjung), Ananda would be pocketing a cool 20.45% more from the RM8.8 billion Tanjung was valued at based on the RM21.80 price it was taken private in July 2010. If these assets are disposed, Tanjung has three other assets - TGV Cinemas, the Tropical Islands Resorts in Germany and a 67% stake in Menara Maxis - the headquarters for Tanjung and Ananda's flagship telecommunications company, Maxis Bhd. At the time of writing, it was said that the tycoon was also looking to dispose TGV Cinemas, which is the second largest cinema player in the country. However, it is the lucrative power business that has been the major driver of Tanjong's financial performance. The company has been open about its ambition to become a global player in the power generation industry, with plans to double its power generation capacity to 6,000MW over the next four to five years. Ananda's power assets are held via wholly owned subsidiary Tanjung Energy Group, which owns and operates eight power plants and has investments in five in Bangladesh, Egypt, Malaysia, Pakistan, Sri Lanka and the United Arab Emirates. They have a total net general capacity of 3,951 MW. No wonder even those who closely follow his moves are puzzled. One key speculation, though, remains: Ananda is 73 years old and doesn't seem to have an offspring who is keen to take over the reins of his empire. His closest offspring is said to be a young daughter from his marriage to a French woman. `It only makes sense to divest these assets at a decent valuation and put the money into trusts for his loved ones,' says one former employee of Usaha Tegas, Ananda's privately held company in Malaysia that essentially manages most of his portfolio of assets in Malaysia and abroad. The tycoon has a son and daughter from his previous marriage to a Thai princess, but both are said to be uninterested in the business. Some reason that Ananda - like some other local tycoons - is delisting his companies as political uncertainties due to the impending general election might affect stock market sentiment. `He is selling out from his riskier assets and keeping the cash-flow generating ones,' notes one industry player. For the record, he relisted part of Maxis in 2009, and more recently, oil and gas services provider Bumi Armada Bhd in 2011. GOOD TIME TO SELL? Interestingly, Ananda is cashing out of his Malaysian power plants when they have less than five years to go on their power purchase agreement (PPA) with Tenaga Nasional Bhd - a factor that is diminishing the attractiveness of the assets, say industry players. The Energy Commission has confirmed that a new power generation tender exercise will replace the current PPAs that expire in 2016 and 2017. The tycoon `s power sale comes slightly lower than that of Temasek Holdings' sale of its Singapore power generation company PowerSeraya to Malaysia's YTL Power International Bhd for S$3.8 billion (RM9.1 billion), currently the biggest power deal in Southeast Asia since 2008. `Selling now has garnered him a decent valuation,' says a fund manager. `Going forward, the local PPAs could face tough negotiations for renewal with state utility Tenaga, while in Egypt, the increasing political risk factor comes to play. The satellite business is also an expensive one, which requires a huge capital outlay and a long gestation period.' Some reports speculate that the sale of Measat may fetch about US$ 500 million. Not unlike power, Measat is also seen as a domestic strategic asset, meaning that giving up control to foreign parties like Arabsat may be difficult, considering the 40% cap on foreign ownership of such firms that Malaysia practises. Whatever the case, for a tycoon who shuns the media glare, Ananda will certainly be grabbing the headlines in the coming weeks from the profits he will potentially reap. His admirers don't doubt that Ananda will cook up an attractive deal for himself. But not everyone is happy with his deals. For example, minority shareholders of Tanjong and Measat will gripe about the higher valuation of the assets that Ananda manages to get after taking the companies private. Recall that in 2007, after he took Maxis Communications Bhd private, he sold a 25% stake in the company to Saudi Telecom Co at a higher valuation. Barely two years since taking Tanjung private, he has once again made a massive gain by breaking up the company and selling it in chunks. To be sure, while he is able to maximise value for his assets, minorities have enjoyed decent returns riding along with him. They are now looking forward to his planned move of relisting Astro on the Malaysian stock exchange this year. 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