These entities will be operating in unregulated environment, subject to market competition. Another Temasek scam baiting Middle Eastern monies?
Singapore Revives Sale of Three Biggest Generators (Update1)
By Michele Batchelor
June 19 (Bloomberg) -- Singapore revived the sale of its three biggest generators after a six-year delay, aiming to benefit from record-high stock values and demand for Asian utility assets.
Power Senoko, Power Seraya and Tuas Power will be sold by early 2009, Temasek Holdings Pte, a government-owned investment company, said in a statement today, without estimating the value. The mandate to sell was granted in 2001. The companies may fetch $4 billion, the Financial Times said Oct. 7, 2005, citing unidentified people close to the talks.
The island-state's benchmark stock index rose to a third- straight record today and the economy is forecast by the government to grow as much as 7 percent this year in the longest expansion since 2000. Rising demand prompted an 8 percent increase in announced energy mergers and acquisitions in Asia to $44.7 billion this year, according to data compiled by Bloomberg.
``We have seen a lot of interest from potential buyers since last year,'' Wong Kim Yin, managing director of investments at Temasek, said in the statement. ``The Singapore economy is poised to grow strongly over the next few years. The conditions are conducive for the divestment.''
Senoko and Seraya, spun off from distributor Singapore Power Ltd. in 2001, and Tuas produce 80 percent of Singapore's electricity. The three generators are barred from holding each others' shares.
Mergers, Acquisitions
Last year, announced mergers and acquisitions of utility companies quadrupled to $83 billion from $19.4 billion in 2005, according to Bloomberg data. Singapore's benchmark Straits Times Index rose 0.1 percent to 3627.41 at the midday break.
``The timing is perfect, the stock market has been running up, valuations are at a premium compared to historical value, so they can sell at decent prices and the economy is on a roll,'' said Chua Hak Bin, an economist at Citigroup Inc. ``At the same time, there's demand for yields and being power generators they can offer steady dividends. There's quite a bit of market appetite for that.''
Singapore Power and partner Babcock & Brown Ltd. on May 11 agreed to buy Perth-based Alinta Ltd., Australia's biggest energy transmission company, for about A$8 billion ($6.7 billion) and carve up the assets.
Gradual Liberalization
The Singapore government has been gradually liberalizing major parts of the economy, such as banking, telecommunications, and power, to enhance competition. Deregulation of the electricity industry started in 1995, and the gas industry in 2000, with the separation of producers from the transmission and distribution networks.
``Temasek will divest all three generation companies,'' the Ministry of Trade and Industry said in March 2000. ``There will be no foreign ownership limit.''
After the completion of second phase of the liberalization in 2006, 75 percent of the total electricity demand was open to retail competition and the total number of contestable consumers rose to 10,000, according to the Energy Market Authority's annual report. Contestable consumers can select a retailer to supply electricity to them.
Singapore buys its natural gas from neighboring Indonesia and Malaysia via pipelines.
Higher Profit
Seraya, which was formed in 1995 and has generating capacity of 3,100 megawatts, reported an 11 percent increase in net income to S$130 million ($85 million) in 2006, according to its annual report on the Web site. Sales rose 38 percent to S$2.1 billion.
Senoko, which spent S$2.55 billion to build its power plants with a capacity of 3,300 megawatts, boosted profit to S$133.3 million from S$119.5 million after sales increased 19 percent to S$1.8 billion, according to the latest annual report on its Web site.
Tuas, which was set up in 1995, has a capacity of 2,670 megawatts built at a cost of S$2 billion. It had net income of S$104 million in 2006 while sales surged 27 percent to S$1.7 billion, according to its latest annual report.
Morgan Stanley and Credit Suisse Group are advising Temasek on the sale.
Showing posts with label power. Show all posts
Showing posts with label power. Show all posts
Tuesday, June 19, 2007
Mitsubishi consortium named preferred bidder for Shuqaiq IWPP
Some old articles on a personal favorite and well-structured financing arrangement. I can imagine why others have not come close to the their bids.
Mitsubishi consortium named PB for Saudi IWPP
10 November 2006
(IJ Online) A consortium led by Japan's Mitsubishi has been named as preferred bidder for the 850MW, 212,000 cubic metres of water per day Shuqaiq IWPP by Saudi Arabia's Water and Electricity Company (WEC).
As predicted by IJ News, the consortium that included Saudi's Acwa and Kuwait's GIC won the US$1.8 billion project by submitting a bid around 20 per cent lower than the next closest offer.
WEC will now negotiate with the consortium and expects to sign a power and water purchase agreement (PWPA) with the project company by the end of the year.
Financial close could come as early as the first quarter of 2007.
The project company will build, own and operate the plant and will be split up as follows:
Acwa/GIC/Mitsubishi - 60 per cent
Public Investment Fund - 32 per cent
SEC - eight per cent
The entire output of the plant will be sold under a 20-year PWPA, which the ministry of finance will guarantee.
WEC has used HSBC as financial adviser, Clifford Chance and Al-Jadaan as legal advisers and Fichtner GmbH as technical consultant.
Opening of Shuqaiq bids reveals firm favourite
01 August 2006
(IJ Online) Saudi Arabia's Water and Electricity Company (WEC) yesterday (Monday) opened bids to develop its latest project, the massive Shuqaiq IWPP - and market rumours put one of the competitors head-and-shoulders above its rivals - writes Luke McLeod-Roberts
This IWPP - which follows hot on the heels of the world's largest IWPP to date, Shuaibah 3 - has seen a host of the usual suspects submit bids, but local sources indicate that a Japan / Saudi / Kuwait consortium is the out-and-out favourite, having seriously low-balled the two other bidders.
The latest WEC venture - a power and water project that will be built in the south west of the kingdom, producing 850MW of power and 212,000 cubic metres of water per day - received bids from the following consortia:
ACWA (Saudi) - Mitsubishi (Japan) - GIC (Kuwait)
Marubeni (Japan) - NPC (Saudi)
Pendekar Power (Malaysia) - Al Jomaih Holding Company (Saudi)
However, the ACWA consortium - advised by Trowers & Hamlins, ILS and its own in-house financial team - is likely to be the winner, given that it is understood to have low-balled the next lowest bid by around 20 per cent.
A formal announcement is not expected until the end of September or the start of October. In the meantime, the bidders have to go through the clarification stage.
Despite a prominent Saudi presence in each of the bidding groups, Omar Al Ghamdi, WEC president, told IJ News that this was not a prerequisite for a successful bid, for which 13 groups pre-qualified after RFP launch in December 2005.
Al Ghamdi revealed that all of the three groups had secure financial packages in place, with international commercial backing and 'a lot of choices', meaning that Shuqaiq could race to financial close before the the mid-2007 target.
The project value will be in the region of US$1.8 billion - an increase on original estimates that were some US$575 million lower. This rise is put down to the global hike in the cost of construction materials.
It will have a 20-year PWPA with WEC, with the option of extending the contract for a further five or six years. WEC will sell on power to the Saudi Electricity Company and water to the SWCC - which is currently being prepared for privatisation.
Shuqaiq will be owned 60:40 by the developer and Saudi public interests. The developer will reportedly be allowed to hold an IPO for 49 per cent of its stake just three years after finacial close, which will be market-based, not price-capped.
The plant will use Arabian heavy fuel oil with conventional steam cycle technology and will be built in the vicinity of Al Shuqaiq, serving the regions of Assir and Jizan.
It is expected to be operational within 52 months from issue of the RFP (March/April 2010) and all units will be completed within eight months of that date.
The next project to be tendered by WEC will be the Ras Al Zour IWPP (RFPs are due out by the year-end) over on the east coast. It will be for 3,000MW and 1,000,000 cubic metres of water per day, and it will be the largest Saudi project yet, dwarfing the much discussed Marafiq project (IJ News, 17 May 2006 ).
Electricity will be fed on to the Saudi grid, while 80 per cent of the water will go to Riyad and 20 per cent to the northern and central region outside the capital.
WEC is in the process of preparing the project report, finalising all requirements with stakeholders and working on the site survey.
It has retained the same advisers for this next project as it has for Shuqaiq - HSBC, Clifford Chance/ Al Jadaan and Fichtner.
Mitsubishi consortium named PB for Saudi IWPP
10 November 2006
(IJ Online) A consortium led by Japan's Mitsubishi has been named as preferred bidder for the 850MW, 212,000 cubic metres of water per day Shuqaiq IWPP by Saudi Arabia's Water and Electricity Company (WEC).
As predicted by IJ News, the consortium that included Saudi's Acwa and Kuwait's GIC won the US$1.8 billion project by submitting a bid around 20 per cent lower than the next closest offer.
WEC will now negotiate with the consortium and expects to sign a power and water purchase agreement (PWPA) with the project company by the end of the year.
Financial close could come as early as the first quarter of 2007.
The project company will build, own and operate the plant and will be split up as follows:
Acwa/GIC/Mitsubishi - 60 per cent
Public Investment Fund - 32 per cent
SEC - eight per cent
The entire output of the plant will be sold under a 20-year PWPA, which the ministry of finance will guarantee.
WEC has used HSBC as financial adviser, Clifford Chance and Al-Jadaan as legal advisers and Fichtner GmbH as technical consultant.
Opening of Shuqaiq bids reveals firm favourite
01 August 2006
(IJ Online) Saudi Arabia's Water and Electricity Company (WEC) yesterday (Monday) opened bids to develop its latest project, the massive Shuqaiq IWPP - and market rumours put one of the competitors head-and-shoulders above its rivals - writes Luke McLeod-Roberts
This IWPP - which follows hot on the heels of the world's largest IWPP to date, Shuaibah 3 - has seen a host of the usual suspects submit bids, but local sources indicate that a Japan / Saudi / Kuwait consortium is the out-and-out favourite, having seriously low-balled the two other bidders.
The latest WEC venture - a power and water project that will be built in the south west of the kingdom, producing 850MW of power and 212,000 cubic metres of water per day - received bids from the following consortia:
ACWA (Saudi) - Mitsubishi (Japan) - GIC (Kuwait)
Marubeni (Japan) - NPC (Saudi)
Pendekar Power (Malaysia) - Al Jomaih Holding Company (Saudi)
However, the ACWA consortium - advised by Trowers & Hamlins, ILS and its own in-house financial team - is likely to be the winner, given that it is understood to have low-balled the next lowest bid by around 20 per cent.
A formal announcement is not expected until the end of September or the start of October. In the meantime, the bidders have to go through the clarification stage.
Despite a prominent Saudi presence in each of the bidding groups, Omar Al Ghamdi, WEC president, told IJ News that this was not a prerequisite for a successful bid, for which 13 groups pre-qualified after RFP launch in December 2005.
Al Ghamdi revealed that all of the three groups had secure financial packages in place, with international commercial backing and 'a lot of choices', meaning that Shuqaiq could race to financial close before the the mid-2007 target.
The project value will be in the region of US$1.8 billion - an increase on original estimates that were some US$575 million lower. This rise is put down to the global hike in the cost of construction materials.
It will have a 20-year PWPA with WEC, with the option of extending the contract for a further five or six years. WEC will sell on power to the Saudi Electricity Company and water to the SWCC - which is currently being prepared for privatisation.
Shuqaiq will be owned 60:40 by the developer and Saudi public interests. The developer will reportedly be allowed to hold an IPO for 49 per cent of its stake just three years after finacial close, which will be market-based, not price-capped.
The plant will use Arabian heavy fuel oil with conventional steam cycle technology and will be built in the vicinity of Al Shuqaiq, serving the regions of Assir and Jizan.
It is expected to be operational within 52 months from issue of the RFP (March/April 2010) and all units will be completed within eight months of that date.
The next project to be tendered by WEC will be the Ras Al Zour IWPP (RFPs are due out by the year-end) over on the east coast. It will be for 3,000MW and 1,000,000 cubic metres of water per day, and it will be the largest Saudi project yet, dwarfing the much discussed Marafiq project (IJ News, 17 May 2006 ).
Electricity will be fed on to the Saudi grid, while 80 per cent of the water will go to Riyad and 20 per cent to the northern and central region outside the capital.
WEC is in the process of preparing the project report, finalising all requirements with stakeholders and working on the site survey.
It has retained the same advisers for this next project as it has for Shuqaiq - HSBC, Clifford Chance/ Al Jadaan and Fichtner.
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