Singapore Power sells RI plants
Singapore Power sells RI plants
Bloomberg, Singapore
Singapore Power Ltd. said it sold its Indonesian power plants that provide electricity to mills owned by Asia Pulp & Paper Co., which stopped payments on US$13.9 billion of debt in March 2001.
Chris Brown, managing director of Singapore Power International, the unit of Singapore Power that has bought power assets in China, Australia and South Korea, said the state-owned company sold its Indonesian assets. He declined to identify who bought them or how much the buyer paid.
"Creditors would want to know who owns the plants," said Alan Greene, a credit analyst at Barclays Capital in Singapore.
"Creditors would want to revisit the power supply agreement to see if it (the terms) makes sense."
The plants, valued at $349 million in January 1998, were built to supply power to the Indonesian mills of Singapore- registered Asia Pulp, whose controlling Widjaja family has been wrangling with creditors over the terms on which it will begin to repay its debts.
Creditors have been trying to put monitors in place to oversee cash flow at Asia Pulp, concerned money may be drained out of the group through trading relationships with related parties. Asia Pulp buys wood from family-controlled companies and makes intra-group sales through other family-controlled units.
Gandi Sulistiyanto, an executive director for Sinar Mas Group, which controls Asia Pulp, confirmed Singapore Power sold the plants. He said he couldn't comment on who bought the assets.
Singapore Power formed a venture with Indonesia's Sinar Mas Group, which controls Asia Pulp, or APP, five years ago, according to a press release dated Jan. 6, 1998.
"For Singapore Power, the joint venture with APP has possibly been mildly embarrassing, compared with its more successful overseas investments, such as in Australia," Barclays' Greene said.
Singapore Power International had a majority stake in Asia Independent Power (BVI) Ltd., or AIP, the venture that paid $349 million to buy the Indonesian plants, the release shows.
"The combined strength and reputation of Singapore Power and APP will make AIP a prime asset and significant player in the region's power market," Singapore Power's Brown said at the time.
The power plants supply Asia Pulp's Indonesian operating units, PT Indah Kiat Pulp & Paper Corp. and PT Pindo Deli Pulp & Paper in West Java, Indonesia.
The facilities consisted of four plants with installed capacity of 313 Megawatts.
Singapore Power is one of several companies controlled by the Singapore government through its investment arm, Temasek Holdings (Pte) Ltd.