Taqa, is poised to complete the acquisition of a majority stake worth under US$1 billion, says its chief.
Taqa to take majority stake in US power plant
DUBAI // Abu Dhabi National Energy Company, or Taqa, is poised to complete the acquisition of a majority stake worth under US$1 billion (Dh3.67bn) in a US based power plant within the coming 30 days, its chief executive said on Monday. "This is a joint venture between three companies around a specific asset, a power plant," said Peter Barker-Homek. "We are the 85 percent shareholder in the joint venture."
The company, which owns power plants in Abu Dhabi, and has oil and gas operations overseas, said its majority stake was part of its strategy to pick up distressed energy companies. He said the minority stakeholders in the plant would include a company from the United States and Britain, but declined to name them. The new subsidiary will be called Taqa Gen-X. Mr Barker-Homek said the acquisition would be financed with cash.
"Institutions need cash and we are able to put that on the table," he said. "We are sitting on $5bn worth of cash or credit lines." Early this month the company reported a fivefold jump in third-quarter net profits on the back of surging oil and gas revenues. Its earnings for the third-quarter jumped to Dh723 million (US$196.8 million) from Dh131.9 million a year ago, mainly due to revenues from oil and gas, it said last week.
Mr Barker-Homek said that Taqa would make an announcement on another two acquisitions in the US power sector worth a total of about $1bn in the next 90 days. One of the investments will be done together with an Asian company, he said, but declined to reveal more details. The Abu Dhabi energy firm would be also setting up a new subsidiary in Iraq which would focus on helping to rebuild the power grid in that country.
Mr Barker-Homek said the investment in the new subsidiary Taqa Babylon, would be about $100m. "We are looking at three cities, Fallujah, Basra and Baghdad," Mr Barker-Homek said, adding that the high growth and healthy reserve base of the country made investing in Iraq attractive. Electricity has become a central, stubbornly negative, bellwether in assessing how far Iraq has come since the US-led invasion to topple Saddam Hussein.
Iraq's electricity system is improving, but supply still meets only about half of demand. Iraqi and foreign officials say rebuilding a power grid crippled by years of sanctions, mismanagement and damage from air strikes could take years, especially as electricity demand soars in step with a more open economy. *Reuters