YTL Power acquiring power assets in Singapore

YTL PowerSeraya Pte Ltd's core business is centred on generation and retailing of electricity in Singapore. (Photo credit: ytlpowerseraya.com.sg)

By Sharen Kaur

  YTL Power International Bhd, a key energy player in Singapore plans to acquire a 396 megawatt (MW) combined cycle power plant and associated assets in the Republic for S$331.45 million (about RM1 billion).

  The assets include a land lease over a site located at 90 Tuas South Avenue 3 and stocks.

  YTL Power's wholly-owned subsidiary, YTL PowerSeraya Pte Ltd has entered into a put and call option agreement with Tuaspring Pte Ltd for the proposed acquisition.

  In a filing with Bursa Malaysia, YTL Power said the acquisition would be settled via S$230 million in cash and S$101.45 million comprising ordinary shares and loan notes amounting to 7.54 per cent of the post-acquisition equity in YTL Utilities (S) Pte Ltd, the immediate holding company of YTL PowerSeraya.

  YTL Power said the acquisition represents a good opportunity to acquire an efficient, operating asset with a proven operational track record.

  It said the acquisition would also enable YTL Power to integrate the assets into YTL PowerSeraya’s existing businesses and consolidate its power generation capacity in Singapore.

  YTL PowerSeraya has a licensed generation capacity of 3,100 MW in Singapore.

  "The YTL Power group are continuously seeking to develop and expand their presence in utility businesses both in Malaysia and offshore. The Board has taken a long-term view on the prospects of the assets as it considers the assets to be a strategic fit to the YTL Power Group’s ongoing power generation business, and an opportunity to pursue its expansion strategy," it said.

  It said that barring any unforeseen circumstances, the proposed acquisition is expected to be completed by the end of the second quarter of the 2020 calendar year.

  The power plant was commissioned in 2016. It was originally constructed as part of a water desalination project following a tender held by the Public Utilities Board of Singapore (PUB). Following defaults by Tuaspring, the Water Purchase Agreement was terminated by PUB in 2019.

  PUB took over the Tuaspring desalination plant in May 2019.

  The assets are being sold via a receiver and manager process managed by Baker Tilly Reid following an enforcement event under Tuaspring’s banking facilities provided by Malayan Banking Bhd's Singapore Branch.

  YTL Power is an international multi-utility group active across key segments of the utilities industry, with a strong track record in both developing greenfield projects and acquiring operational assets through competitive auctions. It currently operates in Malaysia, Singapore, the United Kingdom (UK), Indonesia and Australia, with stakes in projects under development in Jordan and Indonesia.

  Currently, YTL Power owns Wessex Water Limited, a water and sewerage operator in the UK. It also has an indirect 33.5 per cent investment in ElectraNet Pty Ltd, the company which owns and operates the power transmission grid for the state of South Australia under a 200-year concession, as well as an effective interest of 20 per cent in PT Jawa Power, which owns a 1,220 MW power plant in Indonesia.

  YTL Power also has a 100 per cent interest in P.T. YTL Jawa Timur, the operation and maintenance company for PT Jawa Power, and through its wholly-owned independent power producer subsidiary YTL Power Generation Sdn Bhd owns a power station with a generation capacity of 808MW in Terengganu.