Oct. 25, 2000 (Business Times)YTL Power International Bhd is buying a 33 percent stake in an international consortium that will manage the recently privatised South Australian transmission network.
The stake purchase in ElectraNet from investment bank Macquarie Bank Ltdalso marks YTL Power’s maiden venture into the transmission business.
The price was not disclosed.
YTL Power’s interest in the power industry has so far been confined to the generation business through its two gas-fired combined cycle power stations in Johor and Terengganu, which have a total generation capacity of 1,212 megawatts.
YTL Power, the country’s first independent power producer, is bidding for Tenaga Nasional Bhd’s power station in Pasir Gudang, Johor, which is located near its existing power plant in the State.
ElectraNet has successfully bid for the 200-year lease of 5,566km of high voltage transmission lines from the South Australian Government.
The A $938 million (RM1.913 billion) deal, which was announced last month, is targeted for completion by next week.
The 33 percent stake acquired by YTL Power is out of the 40.25 percent owned by Macquarie Bank in ElectraNet. The other consortium owners are Australia’s Powerlink (40.25 percent)and Swiss-Swedish electrical and engineering group ABB (19.5 percent).
The acquisition effectively allows YTL Power to control 33 percent of the asset management and services company formed by the consortium tomanage the business.
YTL Power managing director Tan Sri Francis Yeoh described the ElectraNet purchase as a good deal, indicating that it was an initial step towards more investments in the transmission sector.
“There are a lot of proposals on our table,” he said after signing the sale and purchase agreement with Macquarie director of project and structured finance Jim Miller in Kuala Lumpur yesterday.
Yeoh said there was a “huge vacuum” in the Asia Pacific as many American and European power companies operating in the region had refocused on their home markets.
“This offers investment opportunities for Malaysian companies in the region and ElectraNet is certainly one of them,” he said, adding that YTL Power was equally committed in investing further in the local power sector.
Yeoh said the company’s involvement in ElectraNet would provide it with the “weapons” to participate in all aspects of a reformed Malaysian power industry as outlined in the National Economic Action Council’s plan.
“Australia has been at the forefront of deregulation and privatisation of the electricity industry and there is much that we can learn through the ElectraNet investment.
“On the impact of the ElectraNet purchase to its coffers, Yeoh said the investment would not deplete its healthy cash reserves which was reported to be about RM3 billion.
It will also not affect the company’s other potential investments including the TNB power plant in Pasir Gudang.
The South Australian Government announced the privatisation plan of its electricity assets in early 1998.
Legislation allowing this policy decision was passed in the South Australian Parliament in June, last year.
The privatisation of the 5,566km transmission lines to ElectraNet is believed to be among the first long-term leases given by the Australian Government.
The first one, announced last December, was given to a joint venture between Cheung Kong Infrastructure and Hong Kong Electric.
The consortium paid A $3.52 billion for the 200-year lease of distribution company ETSA, which is ElectraNet’s principal customer, and retail company ETSA Power.
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