GDF Suez, Marubeni get lion’s share of Senoko

15 September 2008

Singapore’s Temasek Holdings says that the successful sale of Senoko Power to an international consortium known as Lion Power reflects the high levels of investor interest and confidence in Singapore’s power market.

Lion Power, which is controlled by Japan’s Marubeni and France’s GDF Suez, will take control of the generating company in a deal valued at S$4 billion. Temasek picked the consortium from five final bidders, describing its proposal as the “most attractive in terms of price and commercial terms among a field of highly reputable investors”.

Senoko Power is Singapore’s largest generating company and the second of Temasek’s three gencos to be sold under a divestment plan. Its strong position in Singapore’s stable power market will provide its new owners with development opportunities, both in Singapore and in the wider Asian market.

“We are pleased with the successful outcome of the Senoko Power divestment. The Lion Power consortium partners are all established industry players with strong track records in power investments globally,” said Gwendel Tung, director of investment at Temasek. “We appreciate the strong investor interest, which is also a reflection of the high quality of the business and the confidence in the Singapore market.”

Senoko owns and operates a portfolio of generation units with a combined capacity of 3300 MW. It has a 30 per cent share of Singapore’s generation market, and also retails electricity to the industrial and commercial sector.

GDF Suez is planning to supply Senoko Power, which operates Senoko power station and the Pasir Panjang gas turbine station, with gas from a new LNG terminal that it is building in Singapore with PowerGas.

GDF Suez and Marubeni each hold a 30 per cent stake in Lion Power, whose other shareholders are Kansai Electric Power Co. (15 per cent), Kyushu Electric Power Co. (15 per cent) and the Japan Bank for International Cooperation (10 per cent). Other groups that are thought to have bid for Senoko include Keppel Corp., a consortium of CLP Holdings and Mitsubishi Corp., Tata Power, and YTL Power.

“With its strategic location and sustained economic growth, Singapore represents a significant development potential for GDF Suez and will enable the Group to strengthen its foothold in South-East Asia,” said Dirk Beeuwsaert, CEO of GDF Suez Energy International.

Lion Power is buying Senoko Power for S$3650 million in cash and will assume S$323 million of the generator’s net debt. The transaction is expected to be complete this month.

In March, Temasek sold the Tuas power station, the smallest and most efficient in Singapore, to China’s Huaneng group for S$4.2 billion. It is planning to sell the third generator – Power Seraya – by the end of next year.

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