Having read this, I feel like I've just watched my neighbor put out
her laundry to dry...
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Temasek to sell its power generation companies from
September
By Wong Siew Ying, Channel NewsAsia | Posted: 19 June 2007 1823
hrs
SINGAPORE: Investment company Temasek Holdings plans to sell three
of its wholly-owned Singapore power generation companies (gencos),
starting from September.
These three gencos, PowerSeraya, Senoko Power and Tuas Power, will
be divested over the next 12 to 18 months.
The deals are expected to be completed by the end of next year or
early 2009.
Together, the three gencos account for 80 percent of Singapore's
power generating capacity, producing about 3,000 megawatts of
electricity each.
Temasek Holdings said it has received good interest for the three
gencos over the past year and would be selling the companies one by
one.
The first is likely to be offered through a tender process and
Temasek will assess the bids based on commercial merit.
It has hired banking advisors Morgan Stanley and Credit Suisse to
facilitate the sales process.
Wong Kim Yin, Managing Director, Investments, Temasek Holdings,
said: "In terms of the first genco, we are more inclined towards a
trade sale. We think that will better meet our objectives than an
IPO (initial public offering). At the moment, we are not inclined
to retain any residual stake in any of the gencos, so a trade sale
would meet that objective better."
But Temasek is not ruling out other options, such as selling shares
through an IPO for the other two gencos.
Temasek has declined to give a dollar value for the gencos, but
reports have estimated that each company could fetch between S$2
billion and S$3 billion.
The long-awaited sale is in line with the government's aim to
liberalise the electricity market in Singapore.
To increase competition, there will be no restrictions on foreign
ownership of the gencos.
Temasek said this change in ownership is unlikely to have an impact
on electricity prices.
Mr Wong said: "Changing ownership by itself is not expected to have
any impact on consumers because they will continue to be served by
SP services, which will continue to buy from the wholesale market
and enjoy the benefit of competition among these gencos."
Temasek said it is an optimal time to sell because of favourable
market conditions and the huge demand for electricity.
Moreover, there is also a gas regulation framework in place to
ensure there is a steady and orderly supply of gas and
power.
