Procedural complexities delay transfer
Monday, 29 October 2007
A Z M Anas
The planned takeover of the country's two large power plants--Meghnaghat and Haripur-by a Saudi-Malaysian consortium Pendekar Energy has got bogged down, as lenders of the current owner, Globeleq, is treading 'warily' over the deal.
Although Globeleq was to hand over the power units to the consortium last month, the issuance of primary shares, fee structuring for lenders and other concessions sought by Pendekar are among the unresolved issues that are delaying the buyout process, according to sources.
"Basically, the whole issue has got stuck up in procedural delays, as Globeleq's lenders are warily advancing," a source close to Globeleq said.
Similarly, the source noted, "Pendeker is pushing for a number of concessions from lenders, while lenders are seeking detailed information about the company. Recently, the fees structure for lenders emerged as the stickiest point. But the differences are narrowing down."
The sources said Pendekar looks to retain up to 25 per cent of share while offloading the majority stakes through the Malaysian stock exchanges, although Globeleq's lenders want Pendekar to keep up to 51 per cent shares with the consortium.
"The issue of retaining majority stakes by Pendekar is still being negotiated," another source said.
Currently, Globeleq's share in the group is 76 per cent and the rest 24 per cent is owned by Jeddah-based Islamic Development Bank Infrastructure Fund.
Despite the sticky points, officials at Globeleq insisted that the takeover will be completed by December.
"If everything goes according to the plan, Pendekar will start to operate the two power plants from December. Hopefully, lenders will give their separate consents at the end of November," an official pointed out.
The source noted that representatives of Globeleq and Pendekar have started talks with the lenders to get their respective consents, while trying to assuage concerns of the lending groups.
"If everything goes well, Pendekar Energy will takeover Meghnaghat and Haripur power plants owned by Globeleq at the end of September. The buyer will also acquire NEPC, co-operated by Globeleq," he told the FE, referring to a meeting with the representatives of Globeleq and Pendekar in the city.
Globeleq representatives have already submitted the buyers' profile to lenders, reiterating the ownership transfer would not have any negative impact on future operations of the companies.
"… CDC Group selected the consortium in the firm belief that it is best placed to take over the ownership of Globeleq and to strengthen the underlying operating businesses in North Africa and South Asia," adviser of Globeleq Paul York said in a recent letter to the lenders.
The CDC Group, through its subsidiary CDC Globeleq Holdings Limited, has recently struck an agreement to sell the entire share of Globeleq Ltd to Pendekar, a consortium of Tanjong Energy Holdings (Malaysia) and Aljomaih Automotive Company (Saudi Arabia) for $493 million.
Tanjong Group, which owns and operates three gas-fired power plants in Malaysia with a total generation capacity of 1,490 megawatt (MW), is the second largest independent power producer in Malaysia. It has also effective stakes in power generation companies in the United Arab Emirates and Egypt.
The company's turnover was US$ 482 million in the fiscal 2007 ending January 31.
Similarly, with its annual turnover of $888 million in 2005, Aljomaih Automotive Company is one of the largest business groups in the Gulf region and is mainly engaged in the distribution of branded products.
The source said, however, the current chief executive officer of Meghnaghat Power Limited (MPL) could be replaced, although a major shake-up is "highly unlikely."
The Haripur and Meghnaghat facilities were originally acquired by Globeleq in December 2003. Globeleq is also a co-operator of the 113 MW natural gas-fuelled NEPC generating company in Bangladesh.
According to figures available with CDC Globeleq, Meghnaghat Power Limited generated revenues amounting to $387 million in fiscal ended in June 2007.
On the other hand, revenues of Haripur Power Limited totalled $230 million in the same period.
The planned takeover of the country's two large power plants--Meghnaghat and Haripur-by a Saudi-Malaysian consortium Pendekar Energy has got bogged down, as lenders of the current owner, Globeleq, is treading 'warily' over the deal.
Although Globeleq was to hand over the power units to the consortium last month, the issuance of primary shares, fee structuring for lenders and other concessions sought by Pendekar are among the unresolved issues that are delaying the buyout process, according to sources.
"Basically, the whole issue has got stuck up in procedural delays, as Globeleq's lenders are warily advancing," a source close to Globeleq said.
Similarly, the source noted, "Pendeker is pushing for a number of concessions from lenders, while lenders are seeking detailed information about the company. Recently, the fees structure for lenders emerged as the stickiest point. But the differences are narrowing down."
The sources said Pendekar looks to retain up to 25 per cent of share while offloading the majority stakes through the Malaysian stock exchanges, although Globeleq's lenders want Pendekar to keep up to 51 per cent shares with the consortium.
"The issue of retaining majority stakes by Pendekar is still being negotiated," another source said.
Currently, Globeleq's share in the group is 76 per cent and the rest 24 per cent is owned by Jeddah-based Islamic Development Bank Infrastructure Fund.
Despite the sticky points, officials at Globeleq insisted that the takeover will be completed by December.
"If everything goes according to the plan, Pendekar will start to operate the two power plants from December. Hopefully, lenders will give their separate consents at the end of November," an official pointed out.
The source noted that representatives of Globeleq and Pendekar have started talks with the lenders to get their respective consents, while trying to assuage concerns of the lending groups.
"If everything goes well, Pendekar Energy will takeover Meghnaghat and Haripur power plants owned by Globeleq at the end of September. The buyer will also acquire NEPC, co-operated by Globeleq," he told the FE, referring to a meeting with the representatives of Globeleq and Pendekar in the city.
Globeleq representatives have already submitted the buyers' profile to lenders, reiterating the ownership transfer would not have any negative impact on future operations of the companies.
"… CDC Group selected the consortium in the firm belief that it is best placed to take over the ownership of Globeleq and to strengthen the underlying operating businesses in North Africa and South Asia," adviser of Globeleq Paul York said in a recent letter to the lenders.
The CDC Group, through its subsidiary CDC Globeleq Holdings Limited, has recently struck an agreement to sell the entire share of Globeleq Ltd to Pendekar, a consortium of Tanjong Energy Holdings (Malaysia) and Aljomaih Automotive Company (Saudi Arabia) for $493 million.
Tanjong Group, which owns and operates three gas-fired power plants in Malaysia with a total generation capacity of 1,490 megawatt (MW), is the second largest independent power producer in Malaysia. It has also effective stakes in power generation companies in the United Arab Emirates and Egypt.
The company's turnover was US$ 482 million in the fiscal 2007 ending January 31.
Similarly, with its annual turnover of $888 million in 2005, Aljomaih Automotive Company is one of the largest business groups in the Gulf region and is mainly engaged in the distribution of branded products.
The source said, however, the current chief executive officer of Meghnaghat Power Limited (MPL) could be replaced, although a major shake-up is "highly unlikely."
The Haripur and Meghnaghat facilities were originally acquired by Globeleq in December 2003. Globeleq is also a co-operator of the 113 MW natural gas-fuelled NEPC generating company in Bangladesh.
According to figures available with CDC Globeleq, Meghnaghat Power Limited generated revenues amounting to $387 million in fiscal ended in June 2007.
On the other hand, revenues of Haripur Power Limited totalled $230 million in the same period.