Edison postpones power plants sale

Edison International, the US energy group, has postponed the $7bn auction of its overseas power plants - one of Asia's largest deals this year - after potential bidders raised concerns over the price and valuation of the assets, The Financial Times reported.

Accoring to the report, prospective buyers, which include the UK's International Power, Japan's Mitsubishi and a consortium of American International Group and GE Capital, are understood to have requested more time before deciding whether to bid.

The auction deadline would be delayed until July 5, 2004 from the original schedule of June 25. People close to the deal said some of the bidders regarded Edison's asking price as too high and were considering pulling out of the auction.

"A lot of people are going to have to make some tough decisions in the next few weeks as it could be difficult to justify the price asked by Edison," said a person close to the deal. A lacklustre response to the sell-off could derail Edison's plans to sell the assets - which include plants in Australia, Indonesia, the UK, Spain and Italy - as a package.

Analysts believe a piecemeal sale of the plants, which have a total capacity of some 6,600 megawatts, could yield lower proceeds.

Industry observers said bidders were finding it difficult to value the assets.

"The assets range from highly deregulated markets such as the UK to tightly-controlled markets like the Philippines and Indonesia," said another person close to the deal.

In Indonesia, Edison has a 45 percent stake at Paiton Energy, which operates the 2x 615 MW coal-fired power plants in East Java. Paiton is in negotiation with state electricity firm PLN to expand the plants by another 800 MW. (*)