KUALA LUMPUR, April 3 (Reuters) - Corston Smith Asset Management, Eastspring Investments and Malaysia's Pilgrims Fund Board have emerged as cornerstone investors in the 2.74 billion ringgit ($747 million) listing of Malaysia's largest independent power firm, Malakoff Corporation Bhd, according to two sources with direct knowledge of the flotation.
The other cornerstone investors are CIMB Principal Asset Management, Great Eastern, Hong Leong Asset Management, Maybank Asset Management, RHB Asset Management and UOB Asset Management, the sources said.
The listing of Malakoff, due to debut on the local bourse in May, comes at a time where Malaysia is navigating a tricky economic environment as slumping global energy prices hurt revenues of the oil exporter and have knocked the country's ringgit to a six-year low.
"The line up (of the cornerstone investors) will give a boost of confidence to the IPO," said one of the sources, who declined to be identified as the talks were confidential.
"The company operates in a defensive sector, it (the IPO) will do well," the source added.
The IPO of Malakoff, a unit of port owner and construction firm MMC Corporation Bhd, would be Malaysia's largest since the 4.6 billion ringgit listing of pay TV firm Astro Malaysia Holdings Bhd in 2012, according to Thomson Reuters data.
MMC is controlled by Malaysia's eighth richest man, Syed Mokhtar Albukhary, according to Forbes.
In addition to funding Malakoff's growth, the proceeds of the listing will be used to cut MMC's borrowings and improve its capital structure, according to a draft prospectus filed to the Malaysian Securities Commission in January.
The issue will comprise 1.52 billion shares, of which 84 percent will be allocated for institutional investors and the balance for retail, according to the draft prospectus.
"They (the cornerstone investors) will take about 30 percent of the offering," one of the sources said.
Malakoff officials were not immediately available to comment.
Malakoff has an effective capacity of 5,350 megawatt comprising six power plants that run on oil, coal and gas, according to its official website. It also owns a net capacity of about 690 megawatt of power production and 444,500 cubic meter per day of water desalination facility overseas, the website said.
Maybank Investment Bank is the principal adviser to MMC for the IPO. The listing has been postponed several times since 2012 mainly due to construction issues at one of its power plants. (Editing by Alison Williams)