Straits Times Forum 8 Dec 08;
I REFER to last Wednesday's article, 'Last of Temasek's power units sold for $3.8 billion to Malaysian company', relating to the sale of PowerSeraya.
The article suggested that the 'surprise sale' could have been driven by a need to raise funds that 'will come in handy in helping cushion losses from other investments that have soured amid the global financial crisis'. It further suggested that Temasek Holdings was concerned about not being able to secure an 'acceptable' price if it had delayed the PowerSeraya sale.
In June last year, Temasek first announced its plan to divest all of its three wholly owned power generation companies (gencos) by early next year. This was part of Temasek's commitment to support an open, competitive and efficient electricity generation market in Singapore.
When the tender sale for PowerSeraya was called off two weeks ago, Temasek had full flexibility as to how and when it would revisit this divestment, including the possibility of delaying it beyond next year if needed. Readers may remember that Temasek had, several years ago, postponed the genco sales when it judged market conditions not conducive to proceed.
In addition, as a long-term investor with net cash and minimal leverage, Temasek does not divest to raise funds to 'cushion losses'. In short, there was no pressure for Temasek to divest its gencos.
Nonetheless, Temasek is pleased to have received an unsolicited proposal which met its requirements. This willing-buyer willing-seller transaction has enabled Temasek to complete the divestment of all its genco assets in an orderly manner within the original schedule.
We hope this clarifies Temasek's approach to the sale of PowerSeraya.
Myrna Thomas (Ms)
Managing Director, Corporate Affairs
Temasek Holdings
