Marubeni group to buy S'pore power company
Saturday, September 6, 2008
A CONSORTIUM led by Japanese trading house Marubeni Corp will buy Singapore's Temasek-owned Senoko Power for S$3.65 billion (US$2.5 billion) in cash, its latest expansion overseas to boost power output.
Marubeni, which has bought power assets in the Philippines and is building plants in the Middle East and Indonesia, wants to nearly double its power capacity in two years. .
Temasek said the sale is expected to be completed by Sept 12 to the group which would also assume S$323 million of Senoko's net debt.
The consortium includes Kansai Electric, Kyushu Electric Power, Japan Bank of International Cooperation and GDF Suez, which said it has a 30-per cent stake.
"This is a huge deal in terms of scale and expense, but it looks to fit in well with Marubeni's previously announced power strategy, providing stable cash flows over a long period," said Michael Wheatley, an analyst at Deutsche Bank in Tokyo.
"Although in terms of return on assets it is not likely to contribute hugely in the short term to earnings ".
But Takashi Murakami, an analyst at Credit Suisse, said Marubeni would have to offload some underperforming assets in future to boost returns.
Senoko, with combined installed capacity of 3,300 megawatt, generates a third of Singapore's electricity.
The natural gas-fired plant is the second of three power units that Temasek hopes to sell by mid-2009. Reuters
Marubeni, which has bought power assets in the Philippines and is building plants in the Middle East and Indonesia, wants to nearly double its power capacity in two years. .
Temasek said the sale is expected to be completed by Sept 12 to the group which would also assume S$323 million of Senoko's net debt.
The consortium includes Kansai Electric, Kyushu Electric Power, Japan Bank of International Cooperation and GDF Suez, which said it has a 30-per cent stake.
"This is a huge deal in terms of scale and expense, but it looks to fit in well with Marubeni's previously announced power strategy, providing stable cash flows over a long period," said Michael Wheatley, an analyst at Deutsche Bank in Tokyo.
"Although in terms of return on assets it is not likely to contribute hugely in the short term to earnings ".
But Takashi Murakami, an analyst at Credit Suisse, said Marubeni would have to offload some underperforming assets in future to boost returns.
Senoko, with combined installed capacity of 3,300 megawatt, generates a third of Singapore's electricity.
The natural gas-fired plant is the second of three power units that Temasek hopes to sell by mid-2009. Reuters
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