Malaysia Hot Stocks-YTL Power up after Singapore deal

KUALA LUMPUR, Dec 3 (Reuters) - Malaysia's YTL Power (YTLP.KL) rose on Wednesday, a day after it announced the $2.5 billion acquisition of Singapore electricity generator PowerSeraya.

Singapore state investor Temasek Holdings [TEM.UL] said on Tuesday it had sold PowerSeraya to Sabre Energy, a wholly-owned subsidiary of YTL, for S$3.8 billion ($2.5 billion).

Temasek said Sabre will pay S$3.6 billion and will assume S$201 million of PowerSeraya's adjusted net debt as of March 31, 2008. [nSP389834]

YTL Power shares were trading 1.04 percent up at 1.95 ringgit by 0123 GMT with 487,400 shares changing hands. It went as high as 1.98 ringgit earlier in the morning.

The main index .KLSE was up 0.11 percent. "The proposal will affect YTL Power's earnings positively, in our view," Merrill Lynch said in a report.

"By our calculation, the proposal will likely boost YTL Power's earnings by 16 percent for FY10, after annualizing PowerSeraya 6MFY09 (six-month financial year 2009) of S$133 million and accounting for higher net interest charges."

"YTL Power delivered on its promise to acquire well-structured and regulated operating assets with steady profits. We estimate the proposal will also lower YTL Power's domestic based earnings from 25 percent to 18 percent; hence lowering earnings downside risk if its Malaysia PPA (power purchase agreement) is renegotiated," it said. (Reporting by Faisal Aziz)