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SEI Holdings acquires outstanding CEPA shares from Hopewell
Consolidated Electric Power Asia Ltd. (CEPA) and Hopewell Holdings Ltd. jointly announced today an agreement for SEI Holdings Inc., a subsidiary of Southern Company, to acquire Hopewell’s 19.99 percent shareholding in CEPA.
Under the agreement, SEI Holdings will buy from Hopewell its CEPA shares in exchange for CEPA’s 80 percent interest in the Tanjung Jati B Project. The Tanjung Jati B Project is a 1,320 megawatt (two units of 660 MW each) coal-fired power station in Central Java, Indonesia. In addition, CEPA will make a cash payment of US$150 million to Hopewell. Hopewell said the deal valued its stake in CEPA at around HK$5 billion (approximately US$646 million). As a result of the deal, Southern Energy-Asia, Inc. will own more than 99.9 percent of CEPA’s shares, with the remainder in the hands of about 70 individual shareholders. This represents an additional 20 percent ownership for Southern Energy in CEPA’s six operating power projects in China and the Philippines, and one project under construction in Sual, Philippines. Southern Energy is a wholly owned subsidiary of Atlanta-based Southern Company, which is the largest electric power generation group in the US. “We are very pleased to be able to reach this agreement, which we believe will bring mutual benefits to both CEPA and the Hopewell Group,” said Raymond D. Hill, CEPA’s managing director and chief executive. “We will continue our development of other projects in the CEPA pipeline, and focus on additional development possibilities in the future.” Hopewell chairman and managing director, Sir Gordon Wu, KCMG, said the arrangement was conducted on good terms and enabled both companies to focus on their strategic strengths. “We believe this is a good deal for our shareholders. It enables Hopewell to complete the development of this power plant in Indonesia and retain a significant interest in the power sector,” said Wu. “We will continue to do what we do best and that is build and develop large-scale infrastructure projects with good long-term returns for our shareholders.” For CEPA’s parent company, Southern Company, the deal helps consolidate its corporate presence in the fast-growing market in Asia through one of the most dynamic power generation companies in the region. “Following the acquisition last January, this agreement demonstrates again Southern Company’s strong confidence in and long-term commitment to CEPA and the tremendous market potential for private-sector power generation in Asia,” said A. W. Dahlberg, chairman of Southern Company. As a result of the shareholding change, Wu will cease to be chairman but remain an active member of CEPA’s board of directors. “Sir Gordon is greatly respected for his strong commitment and illustrious achievements in the power generation industry and other infrastructure sectors across Asia,” said Hill. “As a founder of CEPA, Sir Gordon has made innumerable contributions to the company’s development over the past years. We shall continue to look forward to his counsel and advice in the future.” CEPA has to date completed two power plant projects in Shenzhen, China and four in the Philippines, with a total combined installed capacity of 3,995 MW. An additional project of a 1,200 MW (two units of 600 MW each) coal-fired power plant is under construction in Sual in the Philippines. CEPA has pioneered the use of the BOT (build-operate-transfer) structure in completing the first power generation facilities with private sector participation in emerging Asian markets like China and the Philippines. Set up in April 1993 to hold the majority of the power projects developed by Hopewell, CEPA was listed on the Stock Exchange of Hong Kong in December 1993 as one of the largest new public companies ever listed in Hong Kong. In January 1997, Southern Energy acquired 80 percent of the issued share capital of CEPA and the listing of CEPA on the stock exchange was subsequently withdrawn. Southern Energy develops, builds, owns and operates power production and delivery facilities, and provides a broad range of technical services to utilities and industrial companies in the US and international markets. The company operates electric power facilities and serves customers on four continents in eight countries. Southern Energy is a subsidiary of Southern Company, the largest producer of electricity in the US. Southern Company’s common stock is one of the 20 most widely held corporate stocks in America. Hopewell Holdings Limited is involved in the development and operation of large-scale infrastructure in Asia, including transport, power generation and property projects in the fast-growing economies in Asia. Its largest projects are the development of the Guangzhou-Shenzhen-Zhuhai Superhighway and ancillary road projects which link the largest cities in China’s Guangdong Province, and the development of an extensive elevated road and train system that will ease chronic traffic congestion in Bangkok, Thailand. Tanjung Jati B Project is a 1,320 MW coal-fired power station located in central Java, Indonesia which is expected to be completed in 2000. Construction began in 1996. The total cost of the project is estimated to be approximately US$1,770 million, of which approximately US$440 million is expected to be financed by equity (of which a total of US$244 million has been invested to date) and approximately US$1,330 million is expected to be financed by project finance. This will include project finance from export credit agencies and commercial banks. PT Impa is a 20-percent shareholder in the project.
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