Sembcorp and Keppel not among the shortlisted
Ronnie Lim, Business Times 7 Nov 08;
THREE foreign groups - a Hong Kong CLP-led consortium, Bahrain's Arcapita and Malaysia's YTL - have apparently been shortlisted by Temasek Holdings to buy PowerSeraya, BT understands, as the second round of the two-stage sales process kicked off on Wednesday with the first of the due diligence 'roadshows'.
While the sale of this third and final generation company (genco) being divested by Temasek appears to be progressing on schedule, one question being raised in some quarters is that, given the global financial crisis, can the final bid meet Temasek's reserve price.
Meanwhile, the latest PowerSeraya shortlist has again left in the cold the two local corporates, Sembcorp Industries and Keppel Corporation, which had also submitted bids.
While both have from the outset been keen in all three gencos, they have also always maintained that they would only bid 'at the right price'.
PowerSeraya, which is expanding its cogeneration capacity to supply steam and power to petrochemical plants on Jurong Island, was especially attractive for a company like Sembcorp, as it would have boosted its power business there.
One of the trio shortlisted, Hong Kong's CLP (the former China Light and Power), has reportedly tied up with Japanese trading house Itochu and Thailand Electricity Generating Public Company for its PowerSeraya bid.
'CLP has for some time been looking to expand outside Hong Kong and would also be looking to get more experience in power pooling,' Simon Powell, head of power research at CLSA Asia-Pacific told the South China Morning Post this week.
Bahrain's Arcapita is a name that has popped up in all the genco sales, and it was apparently one of the closest bidders for the 2,670MW Tuas Power - the first to go for $4.235 billion to China Huaneng Group.
Malaysia's YTL surfaced during the sale of the 3,300MW Senoko Power, as it was one of five shortlisted for this second and biggest genco which eventually went for about $4 billion to the Japanese/ French Lion Power consortium led by Marubeni/GDF Suez.
Last week's shortlist of the three bidders was followed by the first of the 'roadshows' at PowerSeraya on Wednesday.
Neil McGregor, the genco's managing director, was conspicuously absent from the Singapore Electricity Roundtable featuring all the big gencos here that day, with observers saying he was apparently hosting the first of the shortlisted bidders at a roadshow.
This second-stage due diligence process includes a comprehensive inside look at the genco, including its books, and meetings with genco management.
Bidders then make their final binding offers to Temasek after that, with the PowerSeraya sale expected to close early December.
Reports suggest that PowerSeraya could fetch up to US$2.5 billion or $3.75 billion, although given the unfolding credit crunch, there is always a possibility that the final bids may come in lower.
Temasek itself has indicated that 'as with the sale of the two other gencos, the sale of PowerSeraya will be subject to acceptable price and commercial terms'.
So whether or not PowerSeraya's sale will eventually close in December remains an open question.
The Singapore investment company - which kicked off the genco divestment with Tuas Power in October 2007 - has given itself until mid-2009 to complete the exercise.
But this was 'barring no macro-shocks', its managing director of investments, Wong Kim Yin, indicated then.
