YTL Power acquires PowerSeraya from Temasek

PETALING JAYA: The cash-rich YTL group yesterday made its second major deal in Singapore in a six-week span, as it bought 100% of the island’s second largest independent power company.

YTL Power International Bhd entered into an agreement with Singapore’s Temasek Holdings Ltd to buy PowerSeraya Ltd for S$3.8bil, which included S$200mil in debt.

Singapore’s largest bank, DBS Bank Ltd, partially funded the deal by providing YTL Corp Bhd a S$2.25bil loan.

YTL Power is a 52.8% subsidiary of YTL Corp.

“We are delighted to have this opportunity to acquire PowerSeraya,” YTL managing director Tan Sri Francis Yeoh said in a statement. “The 3,100 MW (megawatts) of licensed capacity operated by PowerSeraya will give us significant participation in the Singapore energy market.”

The attraction of PowerSeraya lay in its strong position in the energy market and multi-utility businesses, Yeoh said.

The acquisition is expected to be completed by end-February.

YTL Power said its participation in the Singapore electricity market would put it in a prime position to contribute towards the liberalisation of the Malaysian electricity market, currently under study by the Malaysian Government.

PowerSeraya, which is also involved in oil trading, is the third and last of the three power generating companies (gencos) that Temasek put up for sale under its planned divestment of the gencos.

It has a licensed capacity of 3,100 MW, representing 25% of Singapore’s total licensed generation capacity.

Temasek director Gwendel Tung said in a statement: “We are pleased with the successful outcome of the PowerSeraya divestment. Although the tender process was suspended last week, YTL Power continued to pursue the sale and put forward an attractive proposal.”

Tung said YTL Power was an established industry player with a strong track record in power investments and Temasek was confident YTL Power’s expertise and experience would add significant value to Singapore’s electricity market and PowerSeraya in particular.

Singapore operates a liberalised electricity market, Asia’s first such market.

Electricity generated from gencos is sold into the Singapore Electricity Pool, a competitive wholesale market operated and administered by Energy Market Co Pte Ltd.

Electricity is sold to retail customers by retail energy suppliers, of which Seraya Energy Pte Ltd, a 100% subsidiary of PowerSeraya, is the leading power supplier with 18% total market share in 2007.

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