YTL Power’s RM1b purchase of Singapore’s Tuaspring plant
13 Mar 2020
YTL Power International Bhd and its subsidiary has entered into an agreement to acquire the power plant and associated assets of Tuaspring Pte Ltd for S$331.45mil (RM1bil).
Taser Power Pte Ltd, a wholly-owned subsidiary of YTL PowerSeraya Pte Ltd, which in turn is wholly-owned by YTL Power, had entered into a put and call option agreement with Tuaspring.
The assets comprise a land lease over a site located at 90 Tuas South Avenue 3 in Singapore, with a 20-year remaining term and the 396 megawatt combined-cycle power station and stocks and associated assets.
The purchase is to be settled in cash by S$230mil, which will be funded by a bank loan, and the remaining S$101.45mil through the issuance of new ordinary shares and loan notes amounting to 7.54% of the post-acquisition equity in YTL Utilities (S) Pte Ltd, which is the immediate holding company of YTL PowerSeraya.
YTL Power will grant Maybank a put option, exercisable any time within three years from the completion date of the acquisition which is expected to be in the second quarter this year, enabling Maybank to require YTL Power to purchase its 7.54% equity interest in YTL Utilities at a purchase price of S$40mil (RM121.2mil)
The assets were being sold via a receiver and manager process managed by Baker Tilly Reid following an enforcement event under Tuaspring’s banking facilities provided by Maybank’s Singapore branch.
The combined-cycle power plant was commissioned in 2016 and 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 last year.
In a filing with Bursa Malaysia, YTL Power said the assets would form a logical extension of YTL Power’s existing multi-utility operations in Singapore. It said the acquisition would enable the group to integrate the assets into YTL PowerSeraya’s existing business and consolidate its power generation capacity in Singapore.