Keppel FELS buys 10% of Southern Energy’s RP unit

Singapore-based Keppel FELS Energy Pte ltd., will acquire at least 10 percent of Southern Energy Asia Pacific Ltd.’s operations in the country.

The agreement, which is set to be signed shortly, will allow Keppel FELS to take equity position in Southern Energy Philippines Inc. for $164 million (P8.2 billion). Keppel FELS said the deal will pave the way for an exchange of expertise between the company and Southern Energy.

"The deal is part of the strategic partnership it forged with Southern Energy to grow its energy business in the region," Keppel FELS said.

Southern Energy, owned by US-based independent power producer Southern Energy Inc., runs five power plants in the Philippines with a total installed capacity of 2,258 megawatts. SEI is reportedly in the process of constructing another power plant with a capacity of 1,251 megawatts.

These plants are under long-term energy conversion contracts with the National Power Corp. (Napocor), the country’s biggest power distributor.

According to Keppel FELS, about $41.5 million of the purchase cost will be paid by transferring to Southern Energy a 50-percent interest in a new company which will own Keppel FELS’ 180-MW power barges.

The remaining $122.5 billion will be paid in cash which will be sourced through various borrowings of the company.

The deal is expected to be finalized anytime next month if all the necessary arrangements would be concluded soon.