Keppel, J-Power fail to acquire stake at Paiton II power plant

Singaporean company Keppel Corporation Limited announced Friday that its subsidiary Keppel Energy Pte Ltd (KE) and Japan?s Electric Power Development Co., Ltd (J-Power) proposed purchase of a 35 percent equity stake and loan stock interests in P.T. Jawa Power (Jawa Power) and a 100 percent equity interest in P.T. Powergen Jawa Timur from Powergen UK plc had been terminated.

Keppel said Powergen had issued a notice to KE and J-Power to terminate the Deed of Sale and Purchase (SPA) as a result of the KE and J-Power?s decision to defer the signing of the loan agreement relating to the Acquisition Financing. Under the terms of the SPA, the Powergen have a right to terminate the SPA if the loan agreement is not signed by 30 June 2004.

The consortium had decided to defer the signing of the loan agreement as it was unable to get approval from Jawa Power?s other shareholders, which have pre-emptive right to purchase the assets. Keppel, however, said that the consortium ?remains interested to purchase the Project Interests and will continue to monitor the availability of the Project Interests for sale?.

PT. Jawa Power is the owner and operator of Paiton II 2x610 megawatt (MW) coal fired power plant in the Paiton district, Probolinggo. The remaining shares in PT. Jawa Power are owned by German firm Siemens (50 percent) and local firm Bumipertiwi Tata Pradipta (15 percent). Powergen Jawa Timur is a company which sole purpose is to operate, manage and maintain Paiton plant under a 30-year operations and maintenance agreement.

Malaysian utility firm YTL Power International Berhad had also entered into a Share Sale and Purchase Agreement with Indonesian company P.T. Bumipertiwi Tatapradipta to acquire 35 percent equity in P.T. Jawa Power. Bumipertiwi has pre-emptive right to buy Powergen?s 35 percent stake in PT. Jawa Power and 100 percent shares of Powergen Jawa Timur. YTL will buy the shares for USD139.4 million.(alex)