Gas-fired power plant Hyflux Tuaspring has been acquired by YTL Power International, a company managed by Malaysian tycoon Francis Yeoh and his siblings. In a high-profile case, Hyflux went bankrupt in 2018 and was approved to be liquidated in July of last year.
YTL said on Wednesday (June 1) that YTL PowerSeraya, its unit based in Singapore, paid S$270 million for the plant. The 396-megawatt combined-cycle gas turbine power plant’s original consideration had been S$331.45 million.
“The original purchase consideration of SGD331.45 million, which was to be settled via a combination of cash, together with shares and shareholder loans in the holding company of YTL PowerSeraya, was reduced to a pure cash consideration of SGD270.0 million on completion,” the company said in a statement.
The power station had been commissioned in 2016 and was initially part of a desalination project in a private-public partnership project with Singapore’s National Water Agency, PUB.
PUB took over the water desalination plant three years later, while creditors led by Maybank took over the power plant.
“Tuaspring’s combined cycle power station complements the Group’s existing power generation assets in Singapore, creating significant synergies across our portfolio of utility businesses.
The Tuaspring plant is one of the most technologically advanced assets on Singapore’s power generation grid and this was a sound opportunity to acquire a well-structured, operating asset with a proven operational track record, enabling us to consolidate our power generation capacity in Singapore,” said Dato’ Yeoh Seok Hong, the Managing Director of YTL Power.
Francis Yeoh’s father, billionaire businessman and philanthropist Yeoh Tiong Lay, founded YTL Corp, in 1955. He died in 2017.
One of Malaysia’s independent power producers, YTL Power, was founded in 1993.
Mr. Yeoh, 67, ranks 17th on Forbes’ Malaysia’s 50 Richest lists for 2021, with a net worth of $1.25 billion shared with siblings (Yeoh Soo Min, Victor Yeoh Seok Kian, Yeoh Seok Hong, Michael Yeoh, Yeoh Soo Keng, and Mark Yeoh).
He has been ranked as one of “Asia’s 25 Most Powerful and Influential Business Personalities” by Fortune and Business Week.
The Yeoh family’s business empire spans construction, utilities, property development, technology, and hotels, including the Ritz Carlton in Kuala Lumpur.
Strategic Acquisitions: The Yeoh’s Business Approach
The acquisition of Hyflux Tuaspring by Francis Yeoh-led YTL Power International is in line with the strategic business approach typically adopted by the Yeoh family. Known for their acumen in identifying distressed but valuable assets, the family’s business model is centered around their ability to acquire, restructure, and transform such assets into profitable ventures.
In this context, the acquisition of the Hyflux Tuaspring plant serves as another example of Francis Yeoh‘s strategic business thinking. By investing in a well-structured, operational asset, Yeoh has effectively consolidated YTL Power’s generation capacity in Singapore, creating synergies across its portfolio of utility businesses. The move not only boosts YTL Power’s presence in the region but also underlines the company’s commitment to renewable and sustainable energy solutions.
Impact on Singapore’s Power Industry
The acquisition also promises potential impacts on Singapore’s power industry. With Hyflux Tuaspring being one of the most technologically advanced assets on Singapore’s power generation grid, the transition of its ownership to YTL Power could further stabilize and diversify Singapore’s energy supply.
Moreover, as a company led by Francis Yeoh, YTL Power’s ethos of sustainable and renewable energy aligns well with Singapore’s own commitment to these goals. As such, this acquisition could be seen as an indirect boost to Singapore’s sustainability objectives, paving the way for more collaborations between the nation and YTL Power.
In conclusion, this move by Francis Yeoh exemplifies his strategic business acumen while potentially contributing to Singapore’s power sector stability and its sustainable energy objectives.
Please note, however, that as with any business move, there will be challenges ahead, and only time will tell how these potential impacts materialize. /TISG
Hyflux’s Tuaspring Plant to be turned over to PUB on May 17, Water Purchase Agreement terminated
Read also:
Hyflux goes under judicial management – Singapore News
Embattled Hyflux reportedly only has S$21 million left – Singapore News