By Will Kennedy
Dec. 2 (Bloomberg) -- YTL Power International Bhd., a Malaysian utilities company, agreed to buy Singapore power generator PowerSeraya Ltd. from Temasek Holdings Ltd. for about S$3.6 billion ($2.4 billion).
YTL Power will also take on S$201 million of PowerSeraya’s debt, Temasek, Singapore’s state investment company, said in an e-mailed statement today. The transaction is due to be completed early next year.
Temasek had scrapped the sale of Power Seraya on Nov. 25 as the global credit crisis drove down asset prices and froze funding for potential buyers. The investment company started the tender process in October as Singapore further opens the industry to competition.
“After we stopped the tender process last week, YTL Power put forward an unsolicited proposal which met our requirements,” Temasek said in the statement. “We are pleased with the successful outcome of the PowerSeraya divestment.”
Corporate advisory firm Lexicon Partners, based in London and Hong Kong, advised YTL on the transaction.
Temasek has already disposed of Senoko Power Ltd., the island’s biggest generator, and Tuas Power Ltd., the smallest.
A Marubeni Corp.-led group agreed in September to pay S$1.1 million per megawatt of capacity for Senoko Power, and China Huaneng Group said in March it would pay S$1.58 million per megawatt for Tuas Power.
Oil, Gas
Seraya, which generates power from oil and gas, has an installed capacity of 3,240 megawatts, or 30 percent of the island’s capacity.
The pool of funds for mergers and acquisitions has shrunk after the collapse of the U.S. subprime mortgage market. Merger and acquisition transactions in Asia’s power industry totaled $16 billion so far this year, a fifth of 2007, according to data compiled by Bloomberg News.
Power Seraya posted a profit of S$218 million on revenue of S$2.79 billion in the financial year ended March. The Seraya Power Station consists of two blocks of natural gas-fired combined cycle plants and nine units of steam plants.
To contact the reporter on this story: Will Kennedy in London at wkennedy3@bloomberg.net.
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