Thursday, Jul 07, 2011
DUBAI (Zawya Dow Jones)--Acwa Power, the Saudi Arabia-based power and water plant developer, isn't concerned that a recent acquisition in Jordan has some $476 million in outstanding bills to pay, its top executive said Thursday.
Privately-held Acwa Power bought a controlling stake in Jordan's Central Electricity Generating Co., or Cegco, for around $100 million in June when it acquired 65% in Jordan's Enara Energy Investments, whose 51% share in Cegco is valued at $144 million. The debt was claimed soon after the transaction by Jordan Petroleum Refining Co. Ltd. (JOPT.AJ), or JPRC.
The $476 million represents late payments by Cegco to JPRC for the fuel it uses in its electricity stations, Acwa Power Chief Executive Officer Paddy Padmanathan said in Dubai.
However, the cost of fuel is supposed to be paid to Cegco by Jordan's state utility, National Electricity Power Co., or Nepco, he added. Padmanathan said Nepco's payments to Cegco had not yet been made, which was why Cegco had not yet paid JPRC.
"It is technically correct that Cegco and some other companies owe JPRC a certain sum of money, but it is money that is due from Nepco," he said. "The bottom line is, it is all going back to the same place. JPRC is a government entity--and so is Nepco."
JPRC is a joint stock company in which the state Social Security Corp. owns 20% of the stock, and the state-owned Jordanian Electric Power Co. owns some of the 68% of stock listed on the bourse.
Acwa Power's Cegco deal was supported by the International Finance Corp., or IFC, part of the World Bank Group, which is investing $10.5 million in Jordan's largest electricity producer.
The Saudi company is expanding its international presence as part of an aggressive growth strategy, which has seen the 2004 startup develop seven private electricity stations inside the kingdom. It has now bought a private electricity plant in Oman and is working to reach financial close on another private plant in Turkey, besides its acquisition of Cegco.
Padmanathan said the company aims to have around half its total installed capacity outside Saudi Arabia within 10 years.
It is bidding for other projects in Jordan, Kuwait, the U.A.E., Morocco and South Africa.
Last week, Acwa Power announced that it was raising $300 million through a Murabaha loan--its first issuance on the international debt markets.
It aims to follow that move with an initial public offering, or IPO, in Saudi Arabia next year for around 25-30% of the company's stock, and with another debt issue of $300 million to $400 million, said Padmanathan.
-By Angus McDowall of Dow Jones; +971-4-446-1685, angus.mcdowall@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
07-07-11 1148GMT
