Linklaters and Baker & McKenzie are understood to be advising on the upcoming IPO of Malaysia 1mdb's power assets, with the deal estimated to be worth more than $3bn.

The sovereign wealth fund has said it plans to list on the Bursa Malaysia in the fourth quarter of 2014, and expects to use the proceeds to fund future business growth, for partial repayment of its outstanding debt and for general corporate purposes.

In Malaysia, the group is the second largest power producer in the country, with assets including Powertek, which operates three power plants in Melaka, Kuala Langat Power and Negeri Sembilan.

In total it owns 16 power and desalination plants in six countries, namely Malaysia, Egypt and Sri Lanka, Bangladesh, Pakistan and the UAE.

US outfit Baker & McKenzie is understood to be representing the state investor on the transaction, with its member firm in Malaysia, Wong & Partners, providing local law advice.

According to media reports, Wong & Partners has advised the fund on acquisitions in the past.

Magic circle firm Linklaters is meanwhile thought to be advising the banks, which include international players Deutsche Bank and Goldman Sachs, as well as two local banks Maybank and AmBank.

Kuala Lumpar-based outfit Adnan Sundra & Low is acting alongside Linklaters to provide Malaysian law counsel.

Creating more opportunities for foreign law firms in Malaysia were the recent amendments to the Legal Profession Act, which officially came into force on June 3 and represented the first step towards market liberalisation.

Under the new rules, five foreign outfits are now permitted to hold Qualified Foreign Law Firm (QFLF) licences, allowing them to hire Malaysian lawyers who can practice local law in selected areas.

Overseas firms are also now able to form joint law ventures with local players, while Malaysian law firms can hire international lawyers.

To date most international firms have serviced the market from Singapore, and going forward will still be allowed to fly in and out for some work.

However, Legal Week understands that one UK law firm has already applied for a QFLF, and two other firms have made inquiries about how to proceed with an application.