* Picks Deutsche Bank, MayBank as joint global coordinators
* IPO planned for fourth quarter of 2014 (Adds details on power business, company's debt)
By Denny Thomas and Yantoultra Ngui
HONG KONG/KUALA LUMPUR, July 3 (Reuters) - Malaysian state investor 1Malaysia Development Bhd (1MDB) is seeking to raise more than $3 billion through a stock market listing of its energy assets, in what is set to be the nation's second-biggest initial public offering (IPO).
Struggling under the burden of $11 billion in borrowed money, 1MDB is regarded as a cross between a sovereign wealth fund and a private investment vehicle. Prime Minister Najib Razak chairs its advisory board.
1MDB, which owns 16 power and desalination plants in six countries, has appointed Deutsche Bank and Maybank as joint global coordinators for the IPO, which is slated to take place in the fourth quarter of 2014, the company said in a statement on Thursday.
The IPO proceeds will be used to fund growth plans and for the partial repayment of outstanding debt, it said.
Wall Street bank Goldman Sachs was named adviser for the IPO, while domestic banks Maybank and Ambank have been appointed as joint principal advisers, the statement added.
Controversy has dogged 1MDB almost since it was first set up months after Najib came to power in 2009. It was established to fund projects that form part of his Economic Transformation Program. Since then, it has expanded rapidly to achieve a net power generation capacity of 5,570 megawatts to become the country's second-biggest independent power producer.
However, critics have questioned its investment choices, the size of its debt, $2.25 billion parked in a Cayman Island fund, hundreds of millions of dollars of revenue earned by Goldman Sachs for handling its bond issues, delays in its accounts, changes of auditors, and a perceived lack of transparency.
A $1.9 billion bridging loan that fell due in November has been rolled over twice, most recently two weeks ago, in order to give 1MDB more time to launch the IPO.
In 2013, 1MDB generated cash flow of 860 million Malaysian ringgit ($268 million) from operations, far below the annual interest outlay of 1.62 billion. It would have made a 1.85 billion ringgit loss, but for a 2.7 billion revaluation of its property portfolio, Reuters previously reported.
The planned IPO would be Malaysia's second largest behind Felda Global Ventures Holdings Ltd, which raised $3.1 billion in 2012. (Reporting by Denny Thomas and Yantoultra Ngui; Editing by David Holmes and Mark Potter)