2010

Investment in IPP Business in Taiwan - Marubeni Acquired 61.78% Shares of Hsin Tao Power Corporation Gas-Fired Combined Cycle Power Plant in Taiwan -

May. 19. 2010
Marubeni Corporation


Marubeni Corporation (hereafter “Marubeni”) has concluded the Share Purchase Agreement to acquire 61.78% shares of Hsin Tao Power Corporation (hereafter “Hsin Tao Power”) through Taiwan Top Power Holdings. Co., Ltd., a holding company 100% owned by Marubeni.  Hsin Tao Power, located in Hsin Chu County, in the northern part of Taiwan, dispatches and sales power to Taiwan Power Company (hereafter “TPC”) under a long term power purchase agreement (“PPA”).  Part of the total purchase proceeds is funded by a syndicated term loan from a consortium of Japanese and Taiwanese lenders, co-led by Mizuho Corporate Bank, Ltd., Cathay United Bank, China Development Industrial Bank and First Commercial Bank.

Marubeni acquires an aggregate of 61.78%* shares of Hsin Tao Power from 4 affiliate companies of the Evergreen Group, one of the major conglomerates in Taiwan.

Because of tight supply-demand situation of electricity in Taiwan, TPC invited the 2nd round IPP bid in 1995, and Evergreen Group developed, constructed and operated the Hsin Tao Power project, a 600MW LNG-fired combined cycle power plant under a 25-year PPA with TPC.

Because of Hsin Tao Power’s steady operation and stable profit, Marubeni acquired 21.42%** Hsin Tao Power shares in November 2008.  This time, Marubeni was able to acquire additional shares in Hsin Tao Power through a direct negotiation with the Evergreen Group and Marubeni’s shares in Hsin Tao Power have been increased to 83.2% as a result.

Marubeni’s net capacity has been increased to 883MW, which has the largest net capacity among the foreign companies in the Taiwan IPP market, through this investment in Hsin Tao Power, subsequent to the acquisition of 40% shares of the 960MW Ever Power IPP Co., Ltd in January 2008.  IPP projects have been playing a very important role to support TPC’s stable electricity supply in Taiwan.  Marubeni hopes to expand its IPP business in Taiwan as it considers Taiwan as one of the core markets in the Asia-Pacific region.  Marubeni will continue to pursue IPP projects proactively so that it will be able to play a greater role in contributing a stable supply of electricity in Taiwan.

Marubeni envisions overseas IPP investment as one of the core growing business fields and has been active in growing a strong global IPP asset portfolio.  Marubeni will have a gross capacity of 25,874MW and a net capacity (with prorate its ownership percentage) of 7,672MW after this acquisition.  Marubeni is one of the stronger IPP players among the Japanese companies and planning to expand its net capacity to 10,000MW by 2012.

* Marubeni acquired an aggregate of 61.78% shares of Hsin Tao Power, of which 47.76% shares from Evergreen Development, 0.46% shares from Min Yu Investment Co., Ltd., 2.38% shares from New Taiwan Co., Ltd. And 10.99% shares from PIECA Corporation.

** Marubeni acquired an aggregate of 21.42% shares of Hsin Tao Power, 15.95% shares from China Development Industrial Bank, 2.07% shares from TSRC Corporation, 1.70% shares from Fubon Insurance Co., Ltd. And 1.70% shares from Fubon Life Assurance Co., Ltd.

Outline of Hsin Tao Power Corporation
Location:68 Taipower Village, Lin 5, Jen-an Li, Kuan-His Town, Hsin-Chu County,  Taiwan, R.O.C.
Establishment:Jun. 16, 1998
Outline of Business:Power Sales under the BOO scheme for 25 years for TPC
Assets: LNG fired combined cycle power plant made by GE with its capacity at 600MW
Commercial Operation:May, 2002

Outline of Sellers
 Evergreen Development Corporation
 Establishment:Jan. 29, 1973
 Headquarters:3F, No. 16, Songjiang N. Rd., Jhongli City, Taoyuan County, Taiwan, R.O.C.
 Outline of Business:Investment and manufacturing (Metal structure industry)

Min Yu Investment Co., Ltd.
 Establishment:Mar. 31, 1998
 Headquarters:5F, No. 114, Sec. 2, Jianguo N. Rd., Jhongshan District, Taipei City, Taiwan, R.O.C.
 Outline of Business:Investment

New Taiwan Co., Ltd.
 Establishment:May 18, 1961
 Headquarters:No. 327, Sec.1, Jianguo S. Rd., Da-an District, Taipei City, Taiwan, R.O.C.
 Outline of Business:Service (Rental, leasing and installment service)

PIECA Corporation
 Establishment:Nov. 23, 1998
 Headquarters:P.O. Box 71, Craigmuir Chambers, ROAD TOWN, TORTOLA VG1110, British Virgin Islands (B.V.I.)
 Outline of Business:Investment

Outline of Syndicate Loan
Facility Agent:Mizuho Corporate Bank, Ltd.
Mandated Lead Arrangers:Cathay United Bank,China Development Industrial Bank,
First Commercial Bank,Mizuho Corporate Bank, Ltd.
Lenders:a syndicated term loan provided by the 4 banks as stated above

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