The original thread is here for references purposes:
http://www.sgforums.com/forums/10/topics/311471
It has already expired so readers will not be able to post
there. Comments may be posted on this thread instead. The reason
why I am revisiting that particular thread is because of this:
Singapore to sell off state electricity provider
Nesa Subrahmaniyan and Dinakar Sethuraman
Bloomberg
Posted to the web on: 08 July 2008
SINGAPORE — Singapore’s government-owned
investment company, Temasek, has put the city-state’s largest
utility up for sale, further opening the electricity sector to
competition after selling Tuas Power earlier this year.
The sale of Senoko Power would be completed by the end of next
year, Temasek said yesterday .
Built at a cost of S$2,6bn ($1,9bn), Senoko’s 3300MW of capacity
supplies 30% of the island state’s electricity needs last year. The
company earned S$245m before interest, taxes and depreciation on
revenue of S$2,49b n for the year to March 31 .
The sale of Senoko Power comes at a time when mergers and
acquisitions have slumped as the collapse of the US subprime
mortgage market restricts banks from lending and curbs corporate
purchases.
Transactions in Asia’s power industry have totalled $12,9bn this
year, less than a fifth of those last year, according to data
compiled by Bloomberg.
“Of course there’s the market downturn and rising fuel costs,
but Temasek has got more traction going from the sale of Tuas,”
said Simon Powell, head of power research at CLSA in Hong Kong. “The price matters, but there were
parties, including banks, that were eager for Tuas and lost out,
and Senoko offers a chance to get into a stable cash-flow
business.”
Sembcorp Industries, whose electricity unit accounts for about
half of profit, would bid for Temasek’s two power generators after
losing out to China Huaneng Group for Tuas Power, company president
Tang Kin Fei said last month.
In March, Beijing-based China Huaneng agreed to pay S$4,24bn for
Tuas, the smallest of Temasek’s three power generators, which
supply 90% of the island state’s electricity.
Temasek, which manages more than $100bn in assets, last year
revived a plan abandoned six years ago to sell the Singapore
companies in order to tap rising demand for power assets. It has
said it plans to sell its utilities, which also include Power
Seraya , by early next year .
Senoko Power and Power Seraya were transferred in 2001 to
Temasek from Singapore Power, the main electricity supplier, after
the government separated ownership of generators from transmission
and distribution. Temasek had owned Tuas Power since 1995.
The three generators are barred from holding each other’s
shares, according to rules set by the government’s Energy Market
Authority.
The MSCI index of regional utilities
declined 20% this year, compared with a 22% fall in the broader
MSCI Asia Pacific index, excluding Japan.
The Singapore government has been gradually introducing
competition in parts of the economy, including banking, utilities
and telecommunications.
Deregulation of the electricity industry started in 1995 and in
the gas market in 2000.
After completing the second phase of liberalisation in 2006, 75%
of total electricity demand was open to retail competition, and the
total number of so-called contestable consumers rose to 10000,
according to the Energy Market Authority.
