YTL Power acquires Hyflux's Tuaspring power station for $270m in cash

YTL Power's wholly owned subsidiary, YTL PowerSeraya, had completed the purchase at $270 million in cash. PHOTO: ST FILE

SINGAPORE - Malaysia-based YTL Power International has completed its acquisition of Hyflux's Tuaspring power station.

In a statement on Wednesday (June 1), the international utility group said its wholly owned subsidiary, YTL PowerSeraya, had completed the purchase at $270 million in cash.

It noted that the original purchase consideration was $331.45 million, which was to be settled by a combination of $230 million in cash, $101.45 million in shares and shareholder loans in a holding company of YTL PowerSeraya.

YTL Power did not elaborate further on why the deal was restructured.

YTL Power managing director Yeoh Seok Hong said: "Tuaspring's combined cycle power station complements the group's existing power generation assets in Singapore, creating significant synergies across our portfolio of utility businesses.

"The Tuaspring plant is one of the most technologically advanced assets on Singapore's power generation grid and this was a sound opportunity to acquire a well-structured, operating asset with a proven operational track record, enabling us to consolidate our power generation capacity in Singapore".

Following the purchase, YTL PowerSeraya is now one of Singapore's largest power generation companies by registered capacity, based on Energy Market Authority statistics as at March 2021.

The firm also runs electricity retailer Geneco in Singapore.

It will add about 396 megawatts (MW) to YTL PowerSeraya's existing 2,402MW capacity, making it second to Senoko Energy's 2,807MW.

The Tuaspring power station was commissioned in 2016 and was originally constructed as part of a desalination project under a private-public partnership project between national water agency PUB and Hyflux.

PUB had in 2011 signed a water purchase agreement with Hyflux's wholly owned subsidiary Tuaspring Pte Ltd. Under the agreement, Tuaspring had to deliver up to 70 million gallons of desalinated water per day to PUB for 25 years, from 2013 to 2038.

The integrated water and power project meant that power could be generated on-site for the desalination process, while Hyflux could sell excess power generated.

But in February 2017, about a year after Hyflux started selling electricity to the grid - the desalination plant had opened earlier in 2013 - the integrated Tuaspring project failed to make a profit.

The desalination plant was subsequently taken over by PUB in May 2019 following the termination of the water purchase agreement. This was to safeguard Singapore's water supply after the agency found that Hyflux's financial position was untenable.

In March 2019, Hyflux said that Maybank, its biggest secured creditor, had appointed receivers and managers from insolvency firm Ferrier Hodgson to take over the power plant.

Timeline of Hyflux saga

March 2011: Water treatment firm Hyflux wins a tender by national water agency PUB to build Singapore's second desalination plant in Tuas.

The firm said it will build its own power plant to generate power for the desalination process and sell excess power to the grid.

April 2011: Hyflux's wholly-owned subsidiary Tuaspring Pte Ltd signs water purchase agreement with PUB.

September 2013: Tuaspring's desalination plant is officially opened, while its power plant is not yet operational.

February 2016: Hyflux begins selling electricity to the grid, but faces challenges due to an oversupply in the market.

February 2017: Tuaspring fails to turn a profit.

May 2018: Hyflux files for bankruptcy protection and gets an automatic 30-day moratorium. Trading in all its shares and securities is suspended.

March 2019: Hyflux says Maybank, its biggest secured creditor, has appointed receivers and managers from insolvency firm Ferrier Hodgson to take over the power plant.

May 2019: National water agency PUB takes over Tuaspring desalination plant.

June 2020: The Singapore authorities say they are investigating Hyflux over corporate governance breaches. Among the directors under probe is Hyflux executive chairman Olivia Lum.

November 2020: The High Court rules that Hyflux will come under judicial management with immediate effect.

June 2021: Hyflux's judicial managers files an application to wind up the company.

June 2022: YTLPower International completes acquisition of Tuaspring power plant.

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