Power firm auction set to raise $3bn

by Kevin Lim and Saeed Azhar Monday, 07 July 2008

Singapore state investor Temasek Holdings on Monday launched the sale of power generating company Senoko Power in a deal that may raise about $3 billion.

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Companies expected to bid include Singapore's Sembcorp Industries, India's Tata Power, Japan's Marubeni, Bahrain investment bank Arcapita and Malaysia's Tanjong, said banking sources who had been briefed on the deal.
Senoko, which generates about 30 percent of the city-state's electricity, is the second of three power companies that Singapore hopes to sell by mid-2009.

With an electricity generating capacity of 3,300 megawatts, Senoko is larger than the 2,670 MW Tuas Power that was sold to China's Huaneng Group for S$4.2 billion ($3.1 billion) in March this year.

For the financial year ended March 31, 2008, Senoko had revenues of S$2.5 billion and earnings before interest, tax, depreciation and amortisation of S$245 million.

"We have received strong indications of interest from potential bidders in this transaction," Temasek managing director of investment Wong Kim Yin said in a statement.

A Temasek spokesman said the sale of Senoko will involve a two-stage process, with interested parties first submitting expressions of interest and shortlisted bidders given a chance to conduct due diligence before making binding offers.

The sale of Tuas, which involved a similar process, took place over a period of six months.

Credit Suisse and Morgan Stanley are advising Temasek on the deal. (Reuters)



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