S'pore Power completes sale of Australian stakes

Singapore

SINGAPORE Power subsidiary Singapore Power International (SPI) has completed two landmark deals - earlier estimated to be worth a total of more than A$5 billion (S$5.63 billion) - for the sale of equity stakes in SP AusNet and SPI (Australia) Assets (SPIAA) to a unit of State Grid Corporation of China (SGCC).

Announcing the close of the transactions yesterday - seven months after they were first disclosed - SP said it remained a committed long-term investor in Australia's electricity and gas transmission and distribution network.

"Australia continues to be a strategic focus for SP through SPI's remaining 40 per cent interest in SPIAA and 31.1 per cent security interest in SP AusNet," it said.

This follows its sale of a 19.9 per cent stake in SP AusNet to the Chinese state-owned company's subsidiary, State Grid International Development (SGID), for A$824 million, together with another 60 per cent stake in SPIAA, a private company, for an undisclosed amount.

SP's assurances about staying the course in Australia follow news reports suggesting that there seemed to be an exodus of Singapore state-owned firms from the country, with SingTel's review of its Optus satellite business there and CapitaLand's relook at its Australand Property Group stake.

SP AusNet is the largest diversified energy network business in Victoria, owning and operating more than $10 billion of electricity and gas distribution assets, including the state-wide electricity transmission network.

SPIAA owns various electricity, gas and transmission assets in several states, including Victoria, Melbourne, New South Wales and Queensland.

SP said a major consideration in partnering SGID was the latter's significant capability and strong operational track record.

Said Group CEO Wong Kim Yin: "SP is very pleased with the successful completion of the transactions. I am confident that with the strong support from SGCC and SP, the Australian businesses will be well positioned for further opportunity and growth. The outcome has also affirmed Australia's strong support for businesses and foreign investments."

SP's latest annual report also cited chairman Mohd Hassan Marican as saying that "Australia forms a critical part of SP's growth strategy and will remain firmly so". He added that the deals with SGCC will help enhance investment value and position it for future stategic growth.

SP AusNet invested $881.4 million over the past year in capital expenditure to strengthen and expand its network. It also improved supply reliability, reducing the time that customers were without electricity by 13.7 per cent and gas by 11.7 per cent, he said.