Marubeni, Keppel, Sembcorp to Bid on Temasek Units, Bankers Say
By Denise Kee
July 23 (Bloomberg) -- Marubeni Corp., Keppel Corp. and Sembcorp Industries Ltd. plan to bid for the electric utilities being sold by Temasek Holdings Pte, Singapore's government-owned investment company, three bankers with knowledge of the deal said.
Singapore-based Keppel and Sembcorp, the world's biggest oil-rig builders, this month contacted lenders to provide financing and advice, said the bankers, who declined to be identified because the talks are private. The units, Power Senoko Ltd., Power Seraya Ltd. and Tuas Power Ltd., may be valued about S$2.5 billion ($1.7 billion) each and sold in stages over the next two years, they said.
Temasek, which said June 19 it is selling the businesses, wants to tap rising demand for power assets as economic expansion boosts energy use. The utilities account for 90 percent of Singapore's generation capacity and may attract investors in the Asia-Pacific region, where $53.5 billion of acquisitions involving energy companies have been announced this year.
Temasek ``will benefit from bullish investor sentiment in infrastructure assets,'' said Leslie Phang, who oversees $1 billion at Commonwealth Private Bank in Singapore. ``Buyers would snap it up in a jiff because historical profit growth of the three power companies supports the valuation.''
Seraya's net income rose 11 percent to S$130 million in 2006, according to the company's annual report. Senoko's profit gained about 12 percent to S$133.3 million, while Tuas Power had net income of S$104 million as sales surged 27 percent to S$1.7 billion, annual reports show.
`Natural Fit'
``As a key player in Singapore's energy market, greater involvement in the local generation companies would seem a natural fit with our core business,'' Sembcorp said in an e- mailed response to questions. ``The decision to sell the generation companies has just been announced, and we are evaluating our options.''
Keppel and Sembcorp are seeking commitments from lenders to lock them in exclusive relationships because competition for funding will intensify as the sale progresses, the bankers said.
``We are keen to evaluate the opportunities that Temasek's divestment of power plants present,'' Ong Tiong Guan, managing director of Keppel's infrastructure arm, Keppel Energy Pte, said in an e-mail. ``If it makes commercial sense, we will participate in them.''
Marubeni spokesman Daigo Noguchi declined to comment on whether it will bid.
CLP-Mitsubishi Venture
OneEnergy Ltd., a joint venture between CLP holdings Ltd. and Mitsubishi Corp., plans to request proposals this week to appoint a financial adviser, the three bankers said.
CLP Holdings ``has previously indicated that Singapore is a market CLP is interested in,'' said Carl Kitchen, public affairs manager at the company, which owns half of OneEnergy. ``But regarding the specific assets, it's too early to comment on whether CLP is bidding.''
Temasek plans to release relevant information to potential bidders and the sale process could start in September, said Wong Kim Yin, managing director for investments at the company. Temasek said in its June 19 statement that the sale will be completed by end-2008 or early 2009. Morgan Stanley and Credit Suisse Group are advising Temasek on the sale.
Singapore generates 80 percent of its electricity from natural gas imported from Malaysia and Indonesia. Blackouts in the city-state in November 2003 and June 2004 were caused by disruptions in gas supply from Indonesia, according to Energy Market Authority, the government regulator.
Gas Supply
``The biggest risk is, however, the potential supply disruption of gas from Indonesia and Malaysia,'' Commonwealth Private Bank's Phang said, and ``rising commodity costs may put a dent on profitability.''
Singapore plans to invest S$1 billion in a liquefied natural gas terminal by 2012 to meet one-third of the country's gas demand. The facility will provide an alternative supply source.
Seraya and Tuas were set up in 1995, and have generation capacity of 3,100 megawatts and 2,670 megawatts, respectively. Senoko has a capacity of 3,300 megawatts, according to Temasek's June 19 statement.
Temasek was incorporated in 1974 and manages S$129 billion of assets in various industries including telecommunications, financial services and real estates.
Showing posts with label temasek. Show all posts
Showing posts with label temasek. Show all posts
Monday, July 23, 2007
Tuesday, June 19, 2007
Temasek plans to divest three of the largest gencos in Singapore
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.
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.
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