Singapore’s Temasek bankers up for $5b sale of Jemena stake
Singapore’s Temasek has hired investment bank Goldman Sachs to find a buyer for its 40 per cent of gas and electricity distribution giant Jemena.
The Wall Street giant secured the lucrative sell-side mandate late last month, sources said. The news comes after this column flagged that Singapore Power, a subsidiary of Temasek, had begun preparing for a divestment and had hired an investment bank.
Jemena has more than $11 billion in assets in its portfolio, and would likely be valued as high as $15 billion.
Singapore Power 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. 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.
Unlike EnergyAustralia, which is owned by Hong Kong’s CLP Group, Jemena has been a high-performing investment for its owners. In the 12 months to December, it posted a net profit after tax of $301.3 million, up from $217 million. It paid out $165.4 million of that in dividends.
Still, as Street Talk has previously reported, Singapore Power will have its work cut out in nabbing a suitable buyer for its stake in Jemena.
The main issue 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.
One obvious buyer, Canada’s Brookfield, is already in the midst of a takeover of Origin Energy. The competition regulator is nearing a decision on whether to allow it to do so, given
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