<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Last local power company for sale
</TR><!-- headline one : end --><TR>Temasek seeks buyers for PowerSeraya, in bid to liberalise industry </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Robin Chan
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It remains to be seen if Sembcorp Industries or Keppel Corporation can keep PowerSeraya (left) in domestic hands. -- PHOTO: POWER SERAYA STATION
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE battle to buy the third and final of the electricity generation companies (gencos) being sold by Temasek Holdings is now under way.
The Singapore investment company announced yesterday that it has begun the sale process for PowerSeraya. The other two gencos were sold earlier this year.
Interest in PowerSeraya is set to be strong as this will be bidders' last chance to get their hands on one of the three largest gencos in Singapore. Together, the three account for over 80 per cent of Singapore's electricity generating capacity.
Industry observers will also be watching to see if local players Sembcorp Industries and Keppel Corporation will be able to keep PowerSeraya in domestic hands.
Temasek is selling off the three gencos to liberalise the power generation industry and has targeted mid next year to complete all divestments. Private ownership can be expected to trigger off stronger competition among the trio.
Ms Gwendel Tung, director of investments at Temasek, said that PowerSeraya 'has attracted strong indications of interest from potential bidders'.
PowerSeraya has a capacity of 3,100MW, rising to 3,900MW by 2010 after the completion of its 800MW natural gas-fired plant, which would make it the largest genco by capacity based on current figures. It currently accounts for about 28 per cent of Singapore's electricity generation. For the year ending March 31, it had revenues of $2.8 billion and earnings before interest, tax, depreciation and amortisation of $355 million.
Tuas Power, the newest but smallest of Temasek's power companies with a 2,670MW capacity, was sold off in March this year to China Huaneng Group for $4.2 billion. The Chinese power group was considered by analysts to have overpaid for the genco.
Japanese-French consortium Lion Power won the bid for Senoko Power, the largest genco of the three, just last month. It paid $3.65 billion and took on $323 million of net debt in a deal for the 3,300MW capacity genco.
Given the current financial crisis, an analyst said Temasek may take a small discount on the deal compared to its previous divestments. However, because gencos are not losing money, and are assets with a steady cashflow, banks would not have a problem financing a purchase.
A source said that the timeframe of the deal is likely to follow that of the Senoko divestment. So a decision can be expected within the next two months.
The Senoko deal was believed to have attracted some half a dozen bidders. Some of the remaining interested players include India's Tata Power and GMR Group, Hong Kong's CLP and Hong Kong Electric and the Bahrain investment bank Arcapita, sources have said.
Whether they outbid the local players will be something to watch for. PowerSeraya's strategic location and cogeneration capabilities offer attractive synergies. Both Sembcorp and Keppel have small cogeneration plants of less than 800MW capacity each.
Spokesmen for both confirmed their respective firm's interest in the remaining power company, but emphasised any deal would have to make sense commercially. [email protected]
</TR><!-- headline one : end --><TR>Temasek seeks buyers for PowerSeraya, in bid to liberalise industry </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Robin Chan
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
It remains to be seen if Sembcorp Industries or Keppel Corporation can keep PowerSeraya (left) in domestic hands. -- PHOTO: POWER SERAYA STATION
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE battle to buy the third and final of the electricity generation companies (gencos) being sold by Temasek Holdings is now under way.
The Singapore investment company announced yesterday that it has begun the sale process for PowerSeraya. The other two gencos were sold earlier this year.
Interest in PowerSeraya is set to be strong as this will be bidders' last chance to get their hands on one of the three largest gencos in Singapore. Together, the three account for over 80 per cent of Singapore's electricity generating capacity.
Industry observers will also be watching to see if local players Sembcorp Industries and Keppel Corporation will be able to keep PowerSeraya in domestic hands.
Temasek is selling off the three gencos to liberalise the power generation industry and has targeted mid next year to complete all divestments. Private ownership can be expected to trigger off stronger competition among the trio.
Ms Gwendel Tung, director of investments at Temasek, said that PowerSeraya 'has attracted strong indications of interest from potential bidders'.
PowerSeraya has a capacity of 3,100MW, rising to 3,900MW by 2010 after the completion of its 800MW natural gas-fired plant, which would make it the largest genco by capacity based on current figures. It currently accounts for about 28 per cent of Singapore's electricity generation. For the year ending March 31, it had revenues of $2.8 billion and earnings before interest, tax, depreciation and amortisation of $355 million.
Tuas Power, the newest but smallest of Temasek's power companies with a 2,670MW capacity, was sold off in March this year to China Huaneng Group for $4.2 billion. The Chinese power group was considered by analysts to have overpaid for the genco.
Japanese-French consortium Lion Power won the bid for Senoko Power, the largest genco of the three, just last month. It paid $3.65 billion and took on $323 million of net debt in a deal for the 3,300MW capacity genco.
Given the current financial crisis, an analyst said Temasek may take a small discount on the deal compared to its previous divestments. However, because gencos are not losing money, and are assets with a steady cashflow, banks would not have a problem financing a purchase.
A source said that the timeframe of the deal is likely to follow that of the Senoko divestment. So a decision can be expected within the next two months.
The Senoko deal was believed to have attracted some half a dozen bidders. Some of the remaining interested players include India's Tata Power and GMR Group, Hong Kong's CLP and Hong Kong Electric and the Bahrain investment bank Arcapita, sources have said.
Whether they outbid the local players will be something to watch for. PowerSeraya's strategic location and cogeneration capabilities offer attractive synergies. Both Sembcorp and Keppel have small cogeneration plants of less than 800MW capacity each.
Spokesmen for both confirmed their respective firm's interest in the remaining power company, but emphasised any deal would have to make sense commercially. [email protected]
