Malaysia's YTL to buy U.K. utility

Staff and wires

LONDON, England -- Malaysian energy group YTL Power has won the battle to buy Wessex Water, the UK utility arm of failed energy trader Enron Corp, for $1.77 billion.

YTL said Monday it would pay Ł545 million ($778 million) and assume Ł695 million ($991 million) in Wessex debt.

Wessex is owned by Enron unit Azurix Corp.

YTL Power is controlled by YTL Corp, the flagship of the billionaire Yeoh family of Malaysia. Francis Yeoh, son of YTL chairman Yeoh Tiong Lay, spun YTL Power off from the main group and listed it on the Kuala Lumpur stock exchange in 1997.

YTL beat a consortium that included British banking heavyweights Royal Bank of Scotland and Abbey National, along with Goldman Sachs.

According to the Financial Times, another potential buyer was Hong Kong's Cheung Kong Infrastructure Holdings, part of the Cheung Kong group controlled by Asia's richest man, Hong Kong tycoon Li Ka-shing.

The RBOS-led group was the preferred bidder up till Monday but the YTL bid succeeded because it posed fewer regulatory hurdles, people familiar with the talks told Reuters news agency.

Debt retirement

The deal allows Azurix to retire nearly all its debts. As of September 30, Wessex, Azurix Corp. and its subsidiaries had outstanding bonds with a face value of around $1.7 billion, bankers said.

The purchase is expected to close in about two months after approval from Azurix debt holders as well as the U.S. Bankruptcy Court due to Enron's partial ownership of Azurix, Azurix said.

Wessex Water has about 2.5 million water and sewerage customers in the southwest of England.