SingPower seen buying power assets for A$5b
Business Times, Saturday, 24 April 2004
"It neither confirms nor denies talks with US-based TXU Corp"
By Tang Weng Fai
[ SINGAPORE ] Singapore Power yesterday neither confirmed nor denied a report in the UK 's Financial Times that said it was "in advanced talks" to buy the Australian assets of US energy group TXU Corp for more than A$5 billion (S$6.2 billion).
"We are constantly looking out for acquisition opportunities, joint ventures and strategic alliances which complement our business," said SingPower spokesman Steven Lim.
"We are, therefore, approached by different agencies on business opportunities. We naturally do not comment on market speculation and rumors and will make a statement when and if there is cause to do so."
Earlier in the week, banking sources told Reuters that SingPower had bid as much as A$5.5 billion for the assets, in a deal arranged by TXU-appointed Swiss investment banker Credit Suisse First Boston.
FT names Morgan Stanley as SingPower's adviser.
SingPower already owns the electricity transmission network in Victoria, SPI PowerNet, which it bought for A$2.1 billion in 2000.
If the FT report is true, the SingPower deal with Dallas-based TXU would make a big dent in the lat ter's debt, which credit rating agency Standard & Poor's said in February came to US$11.8 billion.
Analysts estimate that more than A$8 billion worth of power and pipeline assets are up for grabs in Australia with the retreat of la rge US-based electricity and utilities companies.
TXU's Australian subsidiary, which is based in Victoria , owns a gas and electricity distribution network, a power generation business and is the third biggest energy retailer in the state.
The company has over 8,000 km of gas pipes and over A$4 billion of distribution assets, about half of which are power distribution assets. The power generation unit has 1,280 megawatt (MW) of capacity.
Australian analysts value TXU's Australian assets at about A$2 billion, with debt at around A$3 billion.
Rival bidders for the TXU assets include Australian energy group Alinta, Hong Kong 's CLP Holdings, and Australian energy utility fund Duet.
TXU had earlier considered a partial float of its Australian unit to help pay off debt and fund growth, but changed its mind last month pending a review by new chief executive officer John Wilder.
"We don't comment on market speculation and rumors and will make a statement, when and if there is cause to do so." Steven Lim, SingPower spokesman.
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