* Power assets, MEASAT sale may fetch $3.5 bln-paper

* Ananda seen getting out of riskier businesses-fund managers (Rewrites, adds analyst comments)

KUALA LUMPUR/SINGAPORE Feb 29 (Reuters) - Malaysia's second-richest man Ananda Krishnan plans to sell satellite operator MEASAT Global Bhd, Singapore's Straits Times newspaper reported, soon after initiating the sale of $3 billion worth of power assets that signal a move to cast off risky operations.

The Straits Times said on Wednesday the power and satellite assets combined could be worth close to $3.5 billion, implying that MEASAT -- which operates regional satellite networks and was taken private by Ananda in 2010 -- may fetch about $500 million.

Talks over a MEASAT sale started in late 2011 and could involve Saudi satellite firm Arabsat taking a strategic or even majority stake in the Malaysian satellite firm, the paper cited a banking source as saying.

Officials from MEASAT and Usaha Tegas, the parent company of MEASAT, said they had no knowledge of the talks. A banker who is familiar with the plan but is not working on the deal told Reuters the plan to sell the satellite asset was at an early stage.

Ananda recently put his entire power portfolio up for sale, with Standard Chartered hired to manage the transaction of about a dozen power plants spanning from Malaysia to Egypt

With $9.5 billion worth of assets, Ananda is Malaysia's second-richest man, according to Forbes, after commodities and property tycoon Robert Kuok. Ananda, who made his first millions as an oil trader, maintains a low profile and little is known about his private life.

Fund managers said the reclusive tycoon is taking advantage of the higher risk appetite in the market to hive off riskier assets from his empire that runs from telecoms to pay-TV.

"The satellite business is an expensive one. It is better to get out of the business, instead of spending all the effort raising money to get new satellites," said a manager with a foreign fund in Kuala Lumpur who was not authorised to talk to the media and thus could not be named.

STRATEGIC ASSET

Harvard-educated Ananda started MEASAT in the early 1990s as part of then-prime minister Mahathir Mohammad's plan to boost the southeast Asian country's communications infrastructure and attain developed-nation status by 2020.

Given that MEASAT is seen as a strategic domestic asset, ceding control to Arabsat may be difficult as Malaysia has a 40 percent cap on foreign ownership of such firms, the Straits Times said.

With the sale of the power assets, which could turn out to be the biggest power asset deal in Southeast Asia if it fetches more than $3 billion, Ananda is exiting a sector whose era of huge profits may have come to an end.

"Governments around the world have woken up to the fact that subsidised first-generation independent power producers like Ananda's do make a lot of money," said a Malaysian fund manager in Kuala Lumpur, who declined to be named because he was not authorised to talk to the media.

"Also, Ananda's power assets are in Egypt and Pakistan where there is so much political turmoil. Better to get out sooner than later," he added.

Ananda is selling off his Malaysian power producer assets just as power purchasing agreements for the first generation of independent power producers come to an end in three to four years and the government looks to reduce gas subsidies to the sector.

The power assets sale has so far attracted 12 bids, Malaysia's Star newspaper reported on Saturday, with Saudi Water & Electricity Co submitting the top bid of 10.85 billion Malaysian ringgit ($3.60 billion).

The selling spree comes less than two years after the tycoon bought out the other shareholders in Tanjong Plc, which holds his power assets, and in MEASAT, around the same time in mid-2010.

He also took private Malaysian pay-TV monopoly Astro All Asia Networks Plc after its expansion into Indonesia and India weighed on its finances, although analysts say Ananda is likely to relist in the near future what they call a "Malaysian cash cow".

Ananda has relisted companies with strong cash flows in recent years, relaunching part of his Maxis Bhd telecommunications services provider in what was Southeast Asia's biggest initial public offering in 2009.

Last year, his team relisted Malaysian oil and gas services provider Bumi Armada Bhd.

Ananda, who spends his time mostly in the south of France with his second wife and young daughter, has also left most of the execution of his business strategies to trusted aides Ralph Marshall and Chan Chee Beng.

Both are directors of the privately held Usaha Tegas, Ananda's investment vehicle, and are seen as next-in-line for control of the 73-year-old's empire. (Reporting by Kevin Lim in Singapore and Yantoultra Ngui in Kuala Lumpur; Additional reporting by Saeed Azhar; Writing by Niluksi Koswanage; Editing by Muralikumar Anantharaman)