A Standard Chartered PLC-controlled power-plant maker at the heart of a U.S. Justice Department bribery probe is seeking new investors as it attempts to restructure $195 million in debt and fund a turnaround.
Continue Reading Below
Maxpower Group Pte. Ltd., a gas-to-power specialist headquartered in Indonesia, wants to raise an unspecified amount of money to make changes to its business model and potentially expand its operations in Myanmar, according to a marketing document for potential investors reviewed by The Wall Street Journal. Maxpower hired a unit of Jefferies Group LLC in Singapore for the proposed private share placement, according to the document.
Representatives for Standard Chartered and Jefferies declined to comment. Maxpower didn't respond to a request for comment.
The teaser document said Maxpower will seek to restructure its debt after the fundraising, with an incoming investor having control over the terms of a deal. Maxpower, majority-owned by Standard Chartered, has recently struggled to service its $195 million in debt, a person with knowledge of the matter said. The company hasn't issued financial statements for 2015 or 2016.
Standard Chartered has been seeking an exit from the business as part of a broader effort to reduce company stakes held by its private equity unit. The bank previously said it would close down the private equity unit once its 80 or so investments are sold. The share sale proposed by Maxpower now would be new equity, not a sale of Standard Chartered's existing stake, according to the Jefferies document.
The Journal reported last year the Justice Department is investigating allegations of bribes being paid to win contracts and other irregularities at Maxpower, and looking into whether Standard Chartered is culpable for not stopping the alleged misconduct. The investigation remains ongoing, a person with knowledge of the matter said. Standard Chartered previously said it alerted authorities to the matter. The Justice Department declined to comment.
Continue Reading Below
Last year, two Standard Chartered executives left Maxpower's board and the bank. Maxpower's chief executive also stepped down and a new CEO started in November. Another Standard Chartered executive on the Maxpower board left the bank this year. Standard Chartered's remaining representative on the board, Nainesh Jaisingh, declined to comment.
The Jefferies document said Maxpower, code-named "Project Maple," is a "unique investment opportunity to invest in a scalable platform in the Indonesian power market." It said the turnaround plan would involve "streamlining existing business and optimizing the engine fleet."
The company could also tap demand for emergency power rental and bypass intermediaries in Indonesia to sign contracts directly with the state power company, the document said.
Last month, the U.K.'s Financial Conduct Authority summoned Standard Chartered PLC officials to a meeting over a whistleblower's claims of misconduct at Maxpower, the Journal reported. The Bank of England is also in contact with the FCA about the allegations.
Write to Ben Otto at firstname.lastname@example.org and Margot Patrick at email@example.com
(END) Dow Jones Newswires
October 12, 2017 03:41 ET (07:41 GMT)