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Saturday February 25, 2012

AK’s power assets draw 12 bidders

Three parties will be shortlisted after final round bidding expected by end-March

PETALING JAYA: The power assets that billionaire T. Ananda Krishnan plans to sell have attracted 12 preliminary international and local bidders, with the final round of bidding expected by end of next month, sources said.

The local bidders included IMalaysia Development Bhd (IMDB), and CIMB/Employees Provident Fund had submitted a joint bid, but the highest was from Saudi Water & Electricity Co at RM10.85bil, sources told StarBizWeek.

A total 18 parties had a look at the assets and the final round, where bidders would be shortlisted to three, will determine which party can fork out between US$3.2bil (RM9.92bil) and US$3.6bil (RM11.16bil) the price that Ananda is looking at.

The US$3.2bilUS$3.6bil figure is based on recent asset sales where the purchase price of each megawatt was tagged at around US$800US$900.

“After the second round of bidding, about three parties will be shortlisted. They will then have to make a binding offer and show proof of funding,” a source said.

Ananda has put up for sale power assets he owns via Tanjong Energy Group, which owns and operates eight power plants with investments in five power plants in Malaysia, Egypt, Bangladesh, Pakistan, Sri Lanka and the United Arab Emirates. Together, they have a total net generating capacity of 3,951 MW.

Though a foreign party can buy all the assets, the setback is current rules do not allow any foreign party to completely own and operate Malaysian power assets; for that it would need to team up with a local player.

The Malaysian assets have a generating capacity of 1,600 MW.

“We don't think they will break up the assets and sell the Malaysian assets separately; he is selling the assets as a whole,” said another source, who believes that these assets can be listed as they are pure power play. “These are assets that have positive cashflow and they can command a premium,” he added.

In Malaysia, Tanjong's power plants are the 440-MW gas-fired open-cycle Telok Gong Power Station 1 and 720-MW gas-fired combined-cycle Telok Gong Power Station 2 as well as the 330-MW gas-fired combined-cycle Tanjong Kling Power Station, all located in Malacca.

Tanjong ventured overseas in 1995 when it invested in Taweelah B, an independent water and power project in Abu Dhabi in the United Arab Emirates. In Egypt, it owns three 682.5-MW gas-fired thermal power stations.

Ananda has been actively managing his assets in recent years. He sold off his gaming business, which was previously parked under Tanjong, and had taken private all his listed companies, but subsequently re-listed some of them on Bursa Malaysia.

The tycoon's telecoms business, Maxis Bhd, has been relisted since 2009, and now, the possibility of Astro All Asia Networks plc making its way back to the exchange is being talked about.

Ananda's oil and gas services provider Bumi Armada Bhd was relisted last year.

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