Chinese firm pips REL, GMR to buy Tuas Power for $3 bn

China's largest power generator China Huaneng has outbid India's Reliance Energy (REL) and GMR Group by placing the highest bid of $3.1 billion for a power firm put on block by Singapore's investment arm Temasek Holdings.

REL and GMR Group were the two Indian bidders for Tuas Power, one of the three power generating companies being privatised by the Singapore government.

Besides, REL and GMR, three international firms, including China Light and Power and HongKong Electric, were also believed to have been in the race to acquire Tuas Power.

Temasek Holdings has signed a share purchase agreement with SinoSing Power Pte Ltd, a wholly-owned subsidiary of China Huaneng, for the 100 per cent sale of Temasek's wholly-owned Tuas Power Ltd for a cash consideration of 4.235 billion Singapore dollars, an official statement said.

The transaction is expected to be completed by March 24, 2008, it added.

Temasek managing director (Investments) Wong Kim Yin said: "China Huaneng is an established player with a strong track record in the power business. Its proposal through SinoSing was the most attractive. It emerged as the winner, based on clear considerations of price and acceptable commercial terms".

The process for disinvestment of Tuas Power was kicked off by Temasek in October. Tata Power, GMR and REL had submitted indicative bids for acquiring Tuas Power. GMR and REL qualified in the initial bidding stage of the two-step process.

Besides Tuas Power, Singapore seeks to sell power firms PowerSeraya and Senoko, aiming to fetch $2 billion from each.

Assets of Tuas Powers include 1,200 MW of oil-fired steam turbine plants and 1,470 MW of gas-fired combined cycle plants. The company caters to the National Electricity Market of Singapore.

It earned revenues of 2.28 billion Singapore dollars and net profit of 177 million Singapore dollars in the fiscal ended March 31, 2007.