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What are the likely reasons?? Even provide financing!!
Published September 3, 2008
Staple financing to oil Senoko deal
Temasek to offer pre- arranged finance package to genco sale bidders
By RONNIE LIM
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(SINGAPORE) Amid the global credit crunch, Temasek Holdings is offering 'staple financing' - a pre-arranged financing package - to bidders like Keppel Corp and other foreign groups vying to buy Senoko Power, Singapore's largest power station.
The move will help Temasek speed up the bidding process for Senoko, the second generating company (genco) that the Singapore investment company is divesting after Tuas Power.
The staple financing - being offered through Temasek's advisers for the genco sales, Credit Suisse and Morgan Stanley - will help ensure more timely bids by bidders, who otherwise may have to scramble for last-minute financing.
Such staple financing (a term derived from the fact that the financing details are stapled to the back of the acquisition term sheet) is gaining popularity especially as the credit crunch dries up funding for mergers and acquisitions.
This was apparently one of the concerns which led Temasek to slightly delay its second genco sale.
It launched the Senoko sale only in early July, four months after selling Tuas Power for S$4.235 billion to China Huaneng Group in mid- March. In the earlier Tuas sale, for instance, some bidders had reportedly withdrawn in the early stages, as their bankers pulled their financing commitments.For the latest Senoko Power sale, five groups - Keppel Corp, Tata Power, a GDF Suez-Marubeni Corp consortium, another CLP Holdings-Mitsubishi Corp joint venture, and Malaysia's YTL Corp - have reportedly been shortlisted by Temasek. Not all may, however, opt for the staple financing offered, as Tata, for instance, has reportedly got the State Bank of India to underwrite US$1 billion for its Senoko bid.
There has been no indication so far which stage the Senoko sale is now at although, following a shortlist, the bidders then get individual 'road shows' where they have a comprehensive inside look at the genco, including its books. After that, they make their 'final binding offers' from which Temasek will pick a winner.
While the earlier Tuas Power sale took five months to complete, Temasek is expected to close the latest Senoko sale faster, given the experience gained from the earlier sale.
The 3,300 megawatt Senoko Power Station supplies about 30 per cent of total electricity needs here. For the year ended March 2008, the company reported revenues of S$2.495 billion and Ebitda (earnings before interest, tax, depreciation and amortisation) of S$245 million.
Senoko is the only genco here - other than Keppel Energy - which has piped Malaysian natural gas supplies.
This is obviously one factor behind Keppel Corp's bid for Senoko, as it will give KepCorp greater operational flexibility in its Malaysian gas use, enabling it to route the gas to either its 500 MW Jurong Island cogeneration plant or to Senoko Power Station.
Published September 3, 2008
Staple financing to oil Senoko deal
Temasek to offer pre- arranged finance package to genco sale bidders
By RONNIE LIM
Email this article
Print article
Feedback
(SINGAPORE) Amid the global credit crunch, Temasek Holdings is offering 'staple financing' - a pre-arranged financing package - to bidders like Keppel Corp and other foreign groups vying to buy Senoko Power, Singapore's largest power station.
The move will help Temasek speed up the bidding process for Senoko, the second generating company (genco) that the Singapore investment company is divesting after Tuas Power.
The staple financing - being offered through Temasek's advisers for the genco sales, Credit Suisse and Morgan Stanley - will help ensure more timely bids by bidders, who otherwise may have to scramble for last-minute financing.
Such staple financing (a term derived from the fact that the financing details are stapled to the back of the acquisition term sheet) is gaining popularity especially as the credit crunch dries up funding for mergers and acquisitions.
This was apparently one of the concerns which led Temasek to slightly delay its second genco sale.
It launched the Senoko sale only in early July, four months after selling Tuas Power for S$4.235 billion to China Huaneng Group in mid- March. In the earlier Tuas sale, for instance, some bidders had reportedly withdrawn in the early stages, as their bankers pulled their financing commitments.For the latest Senoko Power sale, five groups - Keppel Corp, Tata Power, a GDF Suez-Marubeni Corp consortium, another CLP Holdings-Mitsubishi Corp joint venture, and Malaysia's YTL Corp - have reportedly been shortlisted by Temasek. Not all may, however, opt for the staple financing offered, as Tata, for instance, has reportedly got the State Bank of India to underwrite US$1 billion for its Senoko bid.
There has been no indication so far which stage the Senoko sale is now at although, following a shortlist, the bidders then get individual 'road shows' where they have a comprehensive inside look at the genco, including its books. After that, they make their 'final binding offers' from which Temasek will pick a winner.
While the earlier Tuas Power sale took five months to complete, Temasek is expected to close the latest Senoko sale faster, given the experience gained from the earlier sale.
The 3,300 megawatt Senoko Power Station supplies about 30 per cent of total electricity needs here. For the year ended March 2008, the company reported revenues of S$2.495 billion and Ebitda (earnings before interest, tax, depreciation and amortisation) of S$245 million.
Senoko is the only genco here - other than Keppel Energy - which has piped Malaysian natural gas supplies.
This is obviously one factor behind Keppel Corp's bid for Senoko, as it will give KepCorp greater operational flexibility in its Malaysian gas use, enabling it to route the gas to either its 500 MW Jurong Island cogeneration plant or to Senoko Power Station.
