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Ex-1MDB contractor Iskandar Waterfront Holdings considering 2020 IPO

The former building contractor of the embattled 1Malaysia Development Berhad fund is reportedly exploring the possibility of a listing in 2020. Shares of one of its listed subsidiaries has soared nearly 6% since the report.

Iskandar Waterfront Holdings Sdn., the former building contractor of the scandal-plagued 1Malaysia Development Berhad (1MDB) state fund, is reportedly considering an initial public offering (IPO) for as early as 2020.

The firm is looking to raise funds through this listing for its upcoming Bandar Malaysia project, which will cost an estimated US$33.5 billion to build, Bloomberg has reported.

The company, according to people with knowledge of the matter, is potentially looking at a market valuation of 30 billion ringgit (US$9.8 billion). It is currently working with at least one adviser for the listing.

The Bandar Malaysia project is a central transport hub that will be home to the Kuala Lumpur-Singapore high-speed rail when completed. It was conceived under 1MDB in 2011, and was officially launched by former Prime Minister Dato’ Sri Najib Razak with an estimated development cost of 150 billion ringgit (US$35.87 billion).

The project has also reportedly received interest from Chinese technology companies Alibaba Group Holding Limited and Huawei Technologies Co.

Progress on Bandar Malaysia was halted in 2015, after 1MDB came under heavy scrutiny for suspicious money transactions and evidence pointing to money laundering, fraud, and theft. A lawsuit filed by United States Department of Justice (DOJ) alleged that at least US$3.5 billion has been stolen from the fund.

1MDB has struggled to finance the transport project ever since investigations on corruption claims began. The Malaysian government revived the project in April this year, with the Iskandar Waterfront Holdings-China Railway Engineering Corporation (IWH-CREC Sdn.) joint venture team as the main developer.

Iskandar Waterfront Holdings currently holds a 60% stake in IWH-CREC Sdn. The company is also the owner of Bursa Malaysia-listed real estate developer Iskandar Waterfront City Berhad.

Share prices of Iskandar Waterfront City soared nearly six percent by mid-day of Tuesday 03 December, after news of the planned listing emerged. It opened at 0.89 ringgit to begin Wednesday 04 December, before rising to a two-week high of 0.90 ringgit at 9.35am.

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