Shell has at least four Intergen offers, sources say

LONDON/SINGAPORE - At least four bidders are set to compete for Royal Dutch Shell's Intergen power generation business, which could fetch about US$4 billion ($5.73 billion) including debt, sources familiar with the situation said.

Intergen Shell has a 68 per cent stake in InterGen with the rest held by privately-owned US construction firm Bechtel.

The partners are selling 10 Intergen plants with a combined capacity of 7844 megawatts, including 5436 megawatts wholly owned by Intergen, in Britain, the Netherlands, Mexico, Southeast Asia, China and Australia.

Japan's Mitsubishi, which may be bidding with a partner, as well as Malaysian firms Tanjong and YTL are all submitting offers in the second round of bidding, the sources said on Monday.

They are competing against a joint bid from AIG, the world's biggest insurer by market value, and Ontario Teachers, one of Canada's top pension funds, the sources said.

The target date for the second-round offers was Thursday last week but it was not a firm deadline, the sources said.

The four bidders were shortlisted in January after submitting preliminary offers last year.

They have since had due diligence access to information on the business.

A spokesman for Shell declined to comment.

Most of the bidders already have power plants and are trying to expand their presence in the electricity production market.

Financial institutions like AIG are also active investors in public services infrastructure and utilities around the world because such assets offer steady cash flows. Often, they make such investments via their funds or private equity arms.

Shell is selling Intergen as part of a US$12 billion divestment programme that seeks to refocus the company's operations and rebuild investor confidence after a damaging oil reserves over-booking scandal last year.

- REUTERS