Singapore Power quietly sounds out interest in big Jemena stake

afr.com:

Dealmakers from Singapore’s Temasek appear to be accelerating hopes to offload the 40 per cent of gas and electricity distribution giant Jemena, meeting with prospective buyers this week, sources told Street Talk.

Singapore Power, a subsidiary of Temasek, came to own Jemena after buying the then ASX-listed Alinta with Babcock & Brown in 2007. A split of the business left Singapore Power with sole ownership of Jemena. It offloaded a 60 per cent stake to State Grid Corporation of China in 2014.

Jemena operates the largest gas distribution business in NSW, along with a half stake in the ActewAGL distribution partnership, an electricity network business and renewable energy group Ovida.

Jemena is one of the largest operators of gas pipelines on the East Coast. Jason South

Sources said there was no formal sales process under way. Bankers have visited the company’s Singapore offices for several years, and been told it would not hang an official for sale sign but was open to offers. It is understood to have retained an investment bank.

However, Singapore Power faces a number of challenges in finding a suitable – and deep-pocketed – buyer for its stake in Jemena. The first is the majority ownership by State Grid, a state-owned enterprise. That might be too high a hurdle for some groups given the fraught relationship between Canberra and Beijing, not withstanding a recent thaw.

The second consideration is the split of the business between electricity network and gas pipeline assets. The third would be the size of any potential deal. Jemena has more than $11 billion in assets in its portfolio, and would likely be valued at as high as $15 billion. That would mean Singapore Power’s stake could be valued at between $5 billion and $6