Tatas, REL & GMR bid for Singapore power company
Three Indian majors — Tata Power Company (TPC), Reliance Energy and GMR Infrastructure — on Wednesday submitted non-binding bids for Tuas Power of Singapore, one of the three power firms owned by Temasek Holdings. The sale is likely to fetch around $2 billion.
Last week, the Singapore state investor Temasek had set December 12 as deadline for bids. Temasek will shortlist up to six bidders who will be allowed to carry out due diligence before making a final and binding offer. Temasek had previously said it hoped to announce the winning bidder by the first quarter of 2008.
According to sources, as many as 15 companies and funds have submitted non-binding bids. China Light and Power, Hongkong Electric, Japan’s Marubeni, Malaysia’s YTL Corporation, Singapore’s two state-linked conglomerates Keppel Corp and Sembcorp Industries are also believed to be in the race for Tuas.
Earlier, GMR had teamed up with Australia’s Macquarie Group and Kuwait’s sovereign wealth fund to bid for the power company. According to Temasek, Tuas Power’s assets include oil-fired plants with a capacity of 1,200 mega watts (MW) as well as 1,470 MW in gas-fired electricity plants. It reported net profit of $125 million during the last financial year (2006-07) on sales of $1.6 billion.
The other two power firms that Temasek hopes to divest — PowerSeraya and Senoko — have capacities of 3,100 MW and 3,300 MW respectively, but their plants are older and less efficient. PowerSeraya earned $117-million profit on revenues of $1.8 billion, while Senoko’s net profit was $91 million on sales of $1.95 billion during the previous fiscal.
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