KUALA LUMPUR: Tenaga Nasional Bhd (TNB) shares fell as much as 38 sen or 7.7% in intra-day trade yesterday, on news that the utility giant plans to raise some RM10 billion in a sukuk issue to partly finance the purchase of a 70% stake in Project 3B.

The stock plunged to its intra-day low of RM12.68 before finishing the day 2.14% lower at RM12.78, with 13.54 million shares traded. It was the top loser on Bursa Malaysia yesterday.

It lost some RM1.58 billion of its market capitalisation yesterday, with a final valuation of RM72.13 billion. 

Reuters on Tuesday reported that TNB (fundamental: 1.3; valuation: 1.8) plans to raise as much as RM10 billion in an Islamic bond issue, which would be the largest sukuk globally this year.

Plans for the issue are still preliminary, Reuters quoted two sources as saying in the report.

On June 18,  Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili confirmed that TNB is buying over 1Malaysia Development Bhd's (1MDB) 70% stake in Project 3B in Jimah, Negeri Sembilan, held through 1MDB's energy arm, Edra Global Energy Bhd, for an undisclosed price.

TNB shares fell as much as 7% last week on news of the planned purchase, but had since regained lost ground following its president and chief executive officer Datuk Seri Azman Mohd’s statement that the proposed acquisition is not a bailout.

"We wish to stress that no premium will be paid for the acquisition of the 70% stake in the project," Azman said. Japan’s Mitsui Co Ltd will retain its 30% stake in the project.

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This article first appeared in The Edge Financial Daily, on June 25, 2015.