Shares in YTL Power International Bhd were bouyed today by its purchase of Britain's Wessex Water Ltd for a total of RM6.69 billion ($1.77 billion).

YTL Power announced Tuesday it beat Italy's Enel SpA, Hong Kong's Heung Kong Infrastructure Holdings and Germany's Westdeutsche Landesbank to the prized asset to secure one of Malaysia's biggest ever foreign investments.

It will pay Azurix Europe Ltd, a unit of Enron Corp, RM2.9 billion, part of it as debt offset from amounts owed by Azurix to Wessex and assume RM3.7 billion in debt.

It is YTL's second acquisition in just over a year and marked its foray into the water business. Last year, the Malaysian company bought a 33 percent stake in Australia's Electranet.

The YTL deal spurred interest in an otherwise dull bourse, which rose 0.2 percent in morning trade Wednesday. YTL Power shares rose RM0.30 to RM2.88 while parent firm YTL Corp added 12 cents to RM4.80.

Pankaj Kumar of OSK Research said the Wessex acquisition showcased YTL Power's ability to be a global company.

"Upon completion of the (deal), YTL Power will emerge as truly a giant utility company with power assets in Malaysia and Australia and water related assets in Britain," he said.

"Although this may not qualify YTL Power as a global company, it certainly exhibits the ability of a Malaysian company to secure meaningful cash flow generating assets globally."

More to come

YTL Power said its investment in Wessex would enable it to expand its presence in Europe and boost its future earnings.

Wessex was expected to contribute annual turnover and net profit of RM1.4 billion and RM116 million respectively to the group from the financial year 2003, it said.

Owned by collapsed US energy giant Enron Corp, Wessex is a regional water and sewerage company providing water supply to 1.2 million people and sewerage services to 2.5 million in south-west of England.

"The Wessex purchase is a good deal because it enhances YTL Power's earnings," an analyst with a foreign brokerage said.

YTL Power's managing director Francis Yeoh was quoted by The Sun as saying the company still had substantial cash reserves and was on the lookout for more overseas ventures.

"Because of the (long-term) financing (for the Wessex deal), it takes only a little out of our reserve, so we still have a lot of appetite," he added.