Tata Power to bid for Senoko; SBI to underwrite $1 billion loan
02 Sep 2008
Tata Power is bidding for Singapore's largest power producer, the 3300 MW Senoko Power Limited and has tied up financing arrangement with State Bank of India for a $1-billion loan at 350 basis points over London Interbank Offered Rate (Libor), and plans to make binding offer tomorrow .
SBI, which had provided financing facilities for the Tata Group's Corus and Jaguar-Land Rover acquisitions, will underwrite the $1-billion loan for 18-24 months.
Last month Tata Power emerged one of the five shortlisted by Senoko's owner Temasek Holdings, which is keen to divest after it successfully sold Tuas Power to SinoSing Power Pte Ltd earlier in March. (See: Tata Power shortlisted to bid for Senoko Power-Singapore)
The other shortlisted companies include Japan's Marubeni Corporation, Malaysia's YTL Power Bhd, France-based GDF Suez and a tie-up between Hong Kong's CLP Holdings and Japan's Mitsubishi Corp - OneEnergy Ltd.
After conduting due diligence since being shortlisted, the potential buyers will be making their binding offers tomorrow. After a further round of short listing the selected companies will be invited to participate for negotiations.
Temasek, Singapore's state-owned investment company, which is seeking bids for its Senoko Power divestment, is offering optional financial arrangement up to 70 per cent of the bid amount to the final shortlisted bidders in view of the global credit crunch (See: Temasek offers optional financial arrangement to Senoko bidders)
Senoko Power is the second of the three power generating companies that Temasek had planned to divest. After the successful sale of Tuas Power to SinoSing Power Pte Ltd earlier in March to China's Huaneng Group for 2.95 billion, Temasek announced the divestment process of Senoko Power in July 2008. It also said that it would sell its third power generation company PowerSeraya after the sale of Senoko.
Tata Power has invested around Rs5700 crore to build 5,600 megawatts of thermal and wind power capacity across India.