Taqa poised for $5-billion in deals

Abu Dhabi, UAE — State-controlled Abu Dhabi National Energy Co. said Wednesday it expected to announce four new deals worth around $5-billion (U.S.) this year, including a joint venture with a major U.S utility.

“We are in the final stages of negotiations on a number of transactions that we haven’t announced,” chief executive officer Peter Barker-Homek, whose company spent some $7.5-billion (Canadian) on acquisitions in Canada, told reporters in Abu Dhabi.

“We can safely say $2.5-billion (U.S.) of viable opportunities that we will be announcing shortly have been identified and $2.5-billion more to do … I would expect that it would be about four transactions this year.”

The company, better known as Taqa, is 75-per-cent owned by the government of Abu Dhabi, which controls over 90 per cent of the oil reserves in the United Arab Emirates. The rest is publicly traded.

The UAE is the world’s No. 5 oil exporter and the Abu Dhabi government uses Taqa as a vehicle to invest part of its record oil revenues to diversify its assets.

Taqa plans to triple the value of its assets to $60-billion by the end of 2012 from around $21-billion now and Mr. Barker-Homek said it was on track to meet its target with an annual growth rate of 25 per cent.

The utility and petroleum firm last year made acquisitions worth some $11-billion around the world, including the purchase of Canada’s PrimeWest Energy Trust for about $5-billion.

Taqa would use a $1.13-billion bond sale announced this month to pay down existing facilities and finance acquisitions and might seek further financing later in the year, he said.

“Our initial use of proceeds will be to pay down existing facilities and have these facilities on standby for acquisitions,” he said.

Mr. Barker-Homek said there were no immediate plans to sell more bonds but that the firm had “historically gone to the bond market around September and October.”

Taqa sold around $2-billion of bonds in October. It now has around $11-billion in borrowing that it is using to finance existing transactions, Mr. Barker-Homek said.

Taqa is also seeking opportunities in North America, Europe, and the Middle East and North Africa regions, as well as India and Pakistan, with Spain’s Iberdrola and expects to announce a deal in the second half of the year, he said.
The firm expects to announce the U.S. joint venture, in which it will own a 50 per cent share, with a major U.S. utility in the third quarter.

Taqa is also in talks with India’s Tata Group about developing utilities in India, part of plans to boost its generating capacity in the country more than 30-fold.

“We don’t have a tangible project to announce today but we are in discussions on a number of programmes, not only conventional but also renewable,” he said, adding that a deal should be announced in the second half of the year and that India was ripe for more wind and hydro-power projects.

Taqa has also bid for 5,000 megawatts of power projects in Saudi Arabia, in a joint venture with Saudi’s Al Zamil Group.

It expected to know in four to six weeks if that project would go ahead, Mr. Barker-Homek said.

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