As you can see from the above formula, if interest rates go up, then Component B revenue will go up to compensate for the higher borrowing costs. If interest rates go up by 1.0%, Component B revenue will go up by 25 million pounds.
As long as Wessex maintains a gearing ratio of 70% or below, then it would always earn more revenue than the increase in interest costs. Wessex gearing was at 69.873% in FY2021.

Take an example, say cost of equity return allowed is 8.0% and cost of debt is 3.0% and gearing ratio agreed is 70%, then with RCV of Wessex at 3.566 billion pounds in 2021, the Component B revenue for 2021 would have been about:
2.556 bn x [(1-70%)*8% + 70%*3%} = 3.566 bn x 4.5% = 160 million pounds

Wessex did achieve an operating profit of about 166 milion pounds in FY2021.

Come back to Wessex. You need to understand how the business works in order to comprehend what I said earlier that this regulated asset business will never lose money.

The revenue of Wessex or any other regulated asset business (eg. Electranet) comprises two main elements: (1) Component A to cover Operations & Maintenance (O&M) costs, and (2) Component B for capital returns.

Component A is purely a pass-through item based on an agreed sum to cover the expected O&M costs Wessex needs to incur every year to cover its operating costs, manpower, office overhead, maintenance and repair costs for its assets, etc. This sum is pre-determined with Ofwat for every 5 years subject to inflation adjustment every year. For instance, Wessex incurred total O&M costs of about 335 million pounds for FY2021, and it received Component A revenue of about the same to cover the operating costs.

Component B is a revenue sum to give a return to Wessex for spending capex to build the water infrastructure to render its services. In simplicity, this Component B is calculated based on the formula below:
Component B revenue per year = RCV x WACC
where RCV is Regaulatory Capital Value, or the total asset value
WACC is weighted average cost of capital = (1-g)*Ke + g*Kd
where g = gearing ratio
Ke = cost of equity
Kd = cost of debts

Of course, if Wessex really could not liquidate any asset to repay bondholders, then YTL Power would help but it would never be an obligation to help.
It is just like when Sam buy a house with say his brother as the guarantor and Sam defaults on the house loan. The bank will first go after Sam's own money or assets, then go after his brother as the guarantor, but the bank cannot go after Sam's father for his father's money and many assets. But Sam's father can help him pay off but it is not his father's obligation to the bank to help Sam.

JJPTR, Wessex Waters is 100% owned by YTL Power.
When Wessex issues a bond say of 300 million pounds to fund its capex program, those investors who subscribe for the bond will be entitled to some bond yields and they will have assessed the risk and rewards before subscribing to the bond.
If Wessex defaulted on the bond, eg. not able to redeem the bond upon expiry, then the bond holders would go after any cash left in Wessex then try to force Wessex to liquidate some of its assets to repay the bond principal. But the bond holders could not go after YTL Power directly and whatever cash that YTL Power has in the holding company would not be affected by the default of a bond at Wessex which would have no recourse whatsoever to YTLPower.

Myway, I do not know why there was no announcement from YTL yet on the digital bank license.

in this example, of course YTL Power would lose its equity money it put inside this project but no more.

For argument sake, if Jordan project defaulted on its borrowings, the lenders would go after the assets (the land and power plant, the power purchase agreement, etc) owned by Attarat Power and could not go after YTL Power, as all the project debts are ring fenced to the project itself.

JJPTR, if Wessex defaulted on its bond, it would not have any recourse to YTL Power nor cause any cross default to YTL's other subsidiary or project. YTL Power would still be able to use its gross cash of RM10.6 billion to fund its data centre business or solar power projects, Jordan Attarat Power would still be able to draw on its debts to fund the construction of the power plant, YTL Corp would still be able to use its unencumbered cash reserves to buy more assets.
But Wessex itself would suffer from bond rating downgrade and possible penalty by the regulator. I would not be worried with such a scenario as I know its regulated asset business would never lose money, its cash flows would always be able to service its debts and provide the returns to shareholders as long as its operating performance is inline with regulatory requirements. As long as Wessex performs as per requirements, the business will always provide the returns as per the predetermined WACC, which is the weighted average cost of capital.

It is just like when you buy a house, you would not use 100% cash to buy it even though you may have the cash. You will borrow a mortgage to help funding the house purchase. When interest rates go up, you will need to pay a higher monthly instalment so you lose out in high interest rate environment.

For Wessex or a regulated asset business, when interest rates go up, Wessex will get higher water tariffs to compensate for the higher interest rates so to Wessex high interest rates will just get passed though to customers in the form of higher water tariffs. That is the beauty of a regulated asset.

Utilities companies need to spend on capex and most relies on some debts to expand. No one would use all equity money to acquire an asset or to expand on infrastructure network. It is hence more important to manage the debt level and to ensure all debts are properly secured against the assets at each subsidiary level so that the debts will have no restriction over the holding company's use of cash to expand further.

The Jordan project debt is ring fenced at the project level and will be serviced by project cash flows. The project company may have entered into interest rate swaps to protect it against future interest rate hikes. It will have no impact to YTL holding level.

Rising interest rates will have no impact on Wessex Water nor Jordan project. Wessex is in a regulated asset business with a prescribed debt-to-equity ratio of its capex spent and Wessex is well within the prescribed debt-to-equity level below 70%. Rising interest rates will in fact raise its regulated asset value faster, making its Regulatory Capital Value (RCV) higher by minimum 500 million pounds by the end of this 5-year regulatory period. At 1.6x RCV, Wessex will be worth 800 million pounds more in 2025.

As I explained, these debts are mostly ring fenced at subsidiary level and have no recourse to the holding company. YTL Corp is actually in net cash position at the holding level.

Again, I ask the question - what have you got to lose by buying YTL at decade low prices?
Furthermore it still gives decent dividends. The downside may be 10% max but upside is >100%. Can you find me another stock that can give such an odd?

There are plenty of under-valued stocks in Bursa and there are reasons why they are cheap. There are plenty of stocks that are over-valued but still people chase it higher, eg. glove stocks in 2020 and tech stocks in 2021.
Undervalued stocks will not remain low forever, just waiting for the right time to get uncovered. And I believe the right time is here for YTL to deliver and its share price to at least double up in next few months.

Danny, I have not studied Berjaya group but I do know they too have plenty of prime land in KL.
Anyway, I have explained in details why the share price of YTL has dropped in past 7 years, please read the article again.

In fact, YTL group has a total of USD 4.0 billion (RM17.2 billion) of unencumbered cash that can be deployed for M&A deals. When the time comes, they will strike and put the cash reserves to work.

YTL may have some USD debts exposure but most of these borrowings are ring fenced at subsidiary level, meaning that these debts are secured by subsidiary assets or project based, and will not have any recourse to YTL holding level.
For example, RM13.3 (2.4 billion pounds) billion of the debts sit inside Wessex Waters and served by Wassex revenue in pounds, RM6.9 billion (USD1.6 billion) of debts are ring fenced at the Jordan power plant project and will be serviced by project cash flows, etc.

The stock share price is near decade low, what have you got to lose in buying now?

The company has so many good long term assets that take time to unlock, eg. the KL prime land, Niseko landbank, Wessex Waters. PowerSeraya will fly next year and cement division will go up strongly in next few months. Patience is the key.

DannyArcher, it is RM71.6 billion to be exact in my bluesky case.
Please read the article again and go through my arguments there. You are welcome to give any comment then.

Be patient. Multi-rerating factors are coming soon

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-05-story-h1622437940-YTL_Corp_is_soon_becoming_another_10x_Bagger

Look at the desperate sellers at RM1.14 now, how many lots are from LTAT?

As I said before, there are certain groups of investors who are bearish on CPO price outlook and they are not up to date as to what is happening in the edible oil market nowadays. Just look at how many local analysts who are bearish on CPO price, most projecting an average CPO price of just RM4,000-4,200/t for 2022, ridiculous.
LTAT has been ill-advised by these people without realising that Bplant is so so much under-valued.

As for the data centre potential, no doubt Singapore has a bigger MNC base than Malaysia, but YTLPI has addressed this by pulling a fibre cable from Kulai to Singapore so that the MNCs based in Singapore will have no issue of linking with their data centre in Kulai. Johor Menteri Besar knows that well too as Johor has land closest to Singapore to grab a pie of the huge business potential.

Ya IOI Corp would be a good suitor as well. Or Sime Plantation. Anyway it all points to the fact that Bplant is grossly undervalued and has good assets.

And even more riduculous is for Maybank analyst to give zero value to PowerSeraya, the second largest power company in Singapore, just because PowerSeraya has made a few quarters of losses.
The analyst obviously does not understand the electricity market in Singapore and has no idea how much PowerSeraya would be able to make in coming years. Even if it made some small losses in past few quarters, but operational cash flows were still positive after adding back depreciation charges.
At least the analyst should give a value close to its net asset value or shareholders' value which is over SGD1.0 billion.

I understand that even if a subsi is listed, investors will still give a holding company discount to YTLPI but the discount will not be ridiculously big. Investors and analysts will be able to know exactly markets value each subsi and at most they will give a 30% discount for holding company.

For example, if Wessex was to be listed at 1.6x RCV or an equity value of RM18.7 billion, then a 30% discount would give a value of RM13.1 billion to YTLPI or RM1.59 per share of YTLPower. Now look at how much value CIMB analyst gives on Wessex to YTLPI - just a pathetic RM4.9 billion or an almost 75% discount to what could be worth RM18.7 billion.

What I am saying is that YTL is not shy of doing deals that create value for the shareholders, and the family is the largest shareholders of YTL and YTL Power. It is always their interests to create more value for YTL and YTLPower.
Now what's wrong with listing up Wessex? Just losing a minority stake in this regulated asset, but it would still control majority share. The benefits of listing Wessex overwhelmingly outweight the disadvantage. First Wessex would be able to raise funds to fund its capex and maintain high dividends, secondly YTLPI would get back some handsome cash to unlock value, thirdly it would give a proper value to Wessex so that investors know how much it is worth to YTLPI and will not undervalue YTLPI at current depressed level, forthly it would provide options for YTLPI to buy back some shares in Wessex at much lower value when stock market enters into a bear market and hence to create value from the same asset, eg. listing of 10% Wessex shares at 1.5x RCV now and buy back later at 1.0x RCV would nett a cash difference of close to RM1.7 billion for YTLPower. Fifthly, listing up Wessex would force Wessex management to be more transparent and to work harder to improve company performance as it would come under scrutiny of a wider group of investors rather than just monitoring from YTLPI directors.

Another good example for when YTL took private YTL Cement few years back when YTL Cement was trading at a low valuation, then later injected it into the listed MCement for RM5.2 billion, taking home a cool RM2.0 billion cash while increasing its stakes in MCement to 77%. You see from this exercise, what has YTL gotten from the same asset? It has got a handsome extra cash of RM2.0 billion, and unlocked value in YTL Cement, a raised stake in the listed MCement that is much larger and profitable now, while still maintaining a dominant market share in the local cement market.

Once a subsi is listed, the share price of the listed entity may fluctuate and may trade at very low valuation for a certain period. That gives opportunity for YTL to buy back some shares lower than the price it was listed up. For instance, in my suggestion for listing up Wessex at 1.5x - 1.6x RCV, YTLPI would be able to buy back some shares of Wessex should it trade at low valuation close to 1.0x RCV at times of high interest rates or when stock markets are in a bear market. That would create another value from the same asset from just listing up at a premium then buying back at a discount. You need to know that this would be so much easier to create value rather than waiting long time for another good assets at distressed sale.

Once a subsi is listed, then there are more options for YTL group to explore and to unlock further value. It can inject other unlisted asset within the YTL group into the listed entity to unlock value, eg. YTL injected its Australia Marriot hotels into YTL Hosp REIT and may inject its huge landbank of Niseko Japan into the same once the latter achieves steady earnings.

Observatory, whether YTL Group wants to have separate listings for its subsidiaries will depend on whether it will create value for the shareholders. If it can list up a subsidiary at a premium valuation to its own, it will be able to unlock value of that subsidiary. And it will be pure cash proceeds coming in from monetising part of its stakes in subsi. Another advantage of listing up subsi will be that the listed entity will be able to raise funds for own expansion, i.e YTL Hosp REIT listed in Bursa. If the subsi is listed in a foreign stock exchange, it will bring in foreign money and raise its status as an international company, i.e. YTL REIT listed in SGX that can raise funds in Singapore dollars to acquire under-valued assets in Singapore or regional with SGD.

How big is its Sarawak estates? Bplant would need to be a nett cash company for Boustead/LTAT to take it private via SCR. It would need to have nett cash of close to RM1.0 billion in order for the parents not to require external debts.

Currently there are certain groups of investors who are still skeptical of the current palm oil price rally, the sentiment on plantation stocks are dampened by bearish local analysts like RHB, CIMB, Kenanga etc who still predict that average CPO price for this year 2022 will be around RM4,000-4,200/tonne. To me this is a ridiculous assumption as YTD average CPO price already exceeds RM6,000/t and it looks set to remain high at least until end of August 2022. I do not know why these analysts are so bearish on CPO prices and plantation stocks, whether they have own hidden agenda to prevent those plantation stocks share price to shoot up so that these broker houses who have issued plantation call warrants will not need to pay high settlement prices for call warrants, or they are purely too egolistic to correct own bearish view.
They were conservative in January before the invasion of Russia into Ukraine, that was okay. But after the Ukraine war has been going on for 2 months with no sight of ending soon, they are still sticking to own projection for a low average CPO price for 2022, trying to find all sorts of reasons to justify their bearish view like Malaysia will soon be getting 30k foreign labour into the plantation sector to help harvesting. That is nonsense. They are totally on the wrong foot!
How much CPO production would Malaysian planters be able to harvest more with more foreign labour? Malaysia only exports about 18 million tonnes of CPO a year, how will Malaysia be able to fulfill the gap left over by Indonesia who is trying hard to restrict export of CPO and refined products?

To me, it makes more sense for bigger plantation boys like KLK, IOI or Sime Plantation to take over Bplant at a valuation much lower than their own. KLK took over IJM Plantation at close to RM70,000/ha for IJM Plantation estates in Sabah, it could launch a take over offer for Bplant at RM70,000/ha or about RM2.30 per share, which would still be earnings acretive to KLK, adding precious and sizable freehold plantation estates in Malaysia and still has plenty of room to improve on operational performance in later years.

I feel that privatisation may be a bit far stretched assumption as its parent Boustead Group is heavily indebted. It would be hard for it to raise fund to take it private. As Boustead already owns 57% of Bplant, there is not much point to take it private at a price close to the IPO price when it listed Bplant a few years back. Any privatisation offer at anything below RM1.50 would fail miserably.

RM2.00 will be an easy target within this year as there will be multiple re-rating factors coming in next few months:
(1) March qtrly result will show strong earnings on average CPO price of RM6,000/t
(2) March qtrly result will include the disposal gain from Kulai land and a potential special dividend
(3) May futures CPO broke up RM7,000/t and Jun futures touched RM6,800/t. CPO prices will remain high for next few months meaning that the average CPO to be realised by Bplant for the Jun quarter will be higher than RM6,000/t and hence higher earnings
(4) Bplant's parent is heavily indebted and needs cash asap. I predict that Bplant should be working on another land disposal deal and should announce it in next few months
(5) A potential take-over offer for BPlant may be on its way from potential suitors like KLK or Sime Plantation

https://klse.i3investor.com/web/blog/detail/dragon328/2022-04-26-story-h1622262012-BPlant_has_Tremendous_Upsides_as_a_Prime_Take_over_Target

On your second concern, Malaysia government might have its considerations in issuing a temporary ban of renewable energy export as it might want to raise the renewable energy mix in the country power generation to a higher level by 2035.
But sunlight is free and abundant and land is still cheap to make solar energy very affordable here. There are many developers small and big trying to get into renewable energy sector, taking clue from the over 100 bidders in the last round of large scale solar power bidding by Energy Commission. There is no reason why renewable energy should be banned further if domestic renewable energy projects are plenty and many developers here are pushing for solar energy projects including rooftop solar installations.

As the Singapore power import project is real (and sizable and lucrative) and it has attracted many international developers to participate, as far as an Australian consortium planning installing mega solar farm in Darwin and pulling an undersea cable of few thousand km to Singapore. This tender is open to all Malaysia consortium including Tenaga, Malakoff and any company linked to the Johor royal family. Therefore, there is no reason why Malaysian government would ban such bid attempt by a Malaysian consortium to participate in this tender and export renewable energy to Singapore, as it will create new jobs here, encourage good use of land in Johor and development in surrounding areas and enable the Malaysia company to make good money and bring in foreign money. How fast these local companies and Singapore government can lobby our government to agree to the power export to Singapore, I am not sure but good projects like this will come to fruition sooner or later.

As for data centre development, it is a different game from the power export to Singapore. Building data centre in Johor is a no-brainer winning strategy as I have explained in the article the electricity price difference between a solar farm in Johor and in Singapore. Obviously Johor Menteri Besar saw the opportunity too and hence local companies to set up data centre in Johor powered by renewable energy. This is going to be big and going to be the new game of the year.

The other way to quickly raise funds for Wessex and for YTLPI would be for YTLPI to list up certain stakes of Wessex on London stock exchange. As I pointed out earlier, the 3 listed water companies there are trading at 1.27x to 1.488x RCV. So if Wessex issued say 20% new shares for listing at 1.5x RCV, then equity valuation would be about 3.0 billion pounds and Wessex would raise cash of 600 million pounds to fund its capex for next 4 years and to pare down debts. YTLPI might list up another 10%-20% of its stakes in Wessex to take home cash of 300-600 million pounds to realise part of its investments at a premium now. YTLPI might buy back Wessex shares should it trade at lower valuation in later years. For instance, the listed water companies there have seen their share prices fluctuating in a 50% range, or -30% to +20% range. Let the market determine its value and YTLPI being the major shareholder and long term investor may just add stakes while its valuation is low and sell a little more if valuation is high.

Hi Observatory, good to hear from you in this forum. Let me try to provide some thoughts on your two concerns:
(1) Yes Ofwat has determined that for the 5-year determination period, the tariffs for Wessex will be lower than previous 5-year period on lower interest rates and higher performance standards. We can see that earnings contribution from Wessex to YTLPI has dropped from above RM200m per quarter in 2019 to now about RM150m per quarter in 2021. But there are a number of ways that enable Wessex to maintain similar dividend payouts as in previous 5-year period:
(i) to continue outperform peers in Ofwat ranking and get bonus payments which may be 3% - 5% of revenue or 15-25 million pounds
(ii) to get various grants in its business segments, for example Wessex received a total of 7.747 million pounds in FY2021
(iii) disposal of non-core assets, eg. disposal of assets raised cash of 8.9 million pounds in FY2021
(iv) to raise more debts to cover planned capex, eg. Wessex raised new debts of 395 million pounds in FY2021 compared to planned capex of 246 million pounds
(v) to use innovative ways and technology to help reduce capex but maintain performance and quality of service

Anyway it was disappointing to see a lower tariff determined by Ofwat in early 2020. I think water companies will fight for higher tariffs come 2025 for the next 5-year period of 2026-2030, given that interest rates will have increased a lot and each has higher regulated asset base then. We may see a quantum jump in earnings from Wessex from 2026 hopefully.

You can see that the selling of MS is getting less and less. Once they have sold those stocks bought at prices cheaper than RM0.60 then there is no reason for them to sell more shares which were bought at RM0.77 as pointed out by CIMB analyst.

There are three water utilities companies listed in London stock exchange: United Utilities, Svern Trent and Pennon. They are trading at PER of 20x to 36x, dividend yields of 4.67%, 3.35% and 3.23% respectively, and 1.27x Regulatory Capital Value (RCV), 1.42x RCV and 1.488x RCV. Therefore, it is not a dream for Wessex to be listed at 1.5x to 1.6x RCV considering it being a top ranked water company in the UK.

I am confident that YTL Power will be able to declare higher dividends as soon as this FY2022, given that things are getting better in Singapore and they have received a good handy cash of RM3.05 billion from the disposal of Electranet.
I would prefer them raising the annual dividends going forward rather than a one-off special dividend. Save half or RM1.5bn for future projects, the remaining RM1.5 bn cash may be used to raise up dividends by 2 sen to 5 sen every year for the next 5 years.
When dividends are raised to 10 sen per year in next 2-3 years, I do not see any reason why share price will not go back to previous level of RM1.50-1.60 as in 2015-2016 when dividends were 10 sen.

Windy1974, agree with you that YTL management is conservative. I have a friend who had a relative working inside YTL Power. He told me that the key management team in YTL Power was just a small handful of people but included all the necessary expertise in technical, commercial, legal, environmental etc. The management structure is lean and the bosses do not take home big fat fees like Genting boss. At bad years, the directors voluntarily forego their bonus and pay rise.
For new projects, the team is even more conservative. They would look into all possible risks for each project and try to find ways to mitigate each risk whether it is equipment risk, technical performance risk, accidents, country risk, counterparty risks, legal issues, environmental issues. When they finally agree to a contract, you can rest assured that all the risks are well covered and the investment is secured.
Just like when they bought into PowerSeraya, the timing was right when Temasek was desparate to sell and the electricity market was good. The acquisition was good otherwise no banker would lend to them at the time when Lehman's Brothers just collapsed and the world economy was going into recession. That showed to me that banks and bankers had high confidence that YTL would deliver and PowerSeraya would be able to serve its debts.
When YTL Power wanted to buy into the troubled Hyflux power plant, it sent me a signal that they knew the timing was right again to strike, meaning that they believe the market conditions in Singapore would be good again and they would make back money very quickly.

Congratulations to Philip on his Yinson giving him a 11x bagger. Agree with you that to make big money, you need to have an eye for the future. I believe one who bought into Yinson near RM0.30 in 2013 must have had good foresight or high convection in the management to deliver the growth. And there were good reasons why Yinson were trading at depressed level in 2013, as there were too many uncertainties out there and Yinson had not delivered the results. But you bought into it at 30 sen if you knew the business well and can reasonably project that business would start looking good for Yinson. It is a similar case now with YTL Power that trades at near decade low for some reasons, but I know very well that things are starting to get better and better for this company. I have over 15 years of working experience in the power industry and I can see that PowerSeraya will be doing well again from next year. To make big money, don't you have to see things faster than others and see things others don't? When you see the company delivering earnings jumps, then it will be too late to chase. Now it is the time to accumulate while it is still low.
I will not get you to chase if it has doubled in share price. On the contrary, its share price has dropped by half in past few years and the likelihood of it doubling back to RM1.50 is high. I have high convection in the management delivering this time. Even if share price does not move up, I will still enjoy good steady dividends of over 6.7% p.a. Can you tell me which other stock that can give dividends yields of over 6.7% p.a. and may have chance to double its share price in 2-3 years?

What I am trying to say is that for YTL Power to be a 10x bagger, it will need to do all the right things. I am not a short term trader and do not expect YTLPI to shoot up few times in next few weeks or months. It holds long term assets that take time to deliver value to the holding company. YTLPI will need to take initiatives to monetise part of the assets at a premium price at the right time, to continue managing existing companies for them to maximise profits, and to look for new lucrative projects. If it does the right things, then it may be worth 10x higher. Of course whether the share price will move up so much will depend on whether the company can deliver the profit growth and declare higher dividends in next 3 years. I am a freelance researcher and like to share what I analyse and why I think it is undervalued to other like-minded investors. YTL Power is coming at a low base now, way cheaper than few years back. If analysts gave a fair value of RM1.60 to YTLPI in 2015, why now give lower for a company with stronger footing now and embarking on next growth phase? Please note that Wessex's RAB is now 30% higher than in 2015, Electranet has been sold at 5x higher than the value given by an analyst, the company is in nett cash position, PowerSeraya is going into a tight supply market, and the green data centre park has started with a bang.

4. Yes companies with high debts usually have low profitability but sometimes in order to expand you need to borrow, it cannot be using 100% equity money to acquire another company as equity money is always more expensive than debts. Warren Buffet did invest in utilities company like the railroad company BNSF with some borrowings and he thought it would be a key asset for Berkshire a century from now. DNex did borrow money to buy over SilTerra, otherwise it would have missed this opportunity. HIbiscus also need to borrow in order to take over Rapsol assets that will give it doubling oil extraction capacity. Warren Buffet bought into BNSF at a bargain and it may have been a multi-bagger for Berkshire if the asset is sold at a premium. Warren Buffer also bought into OXY, an oil shale company at a good price though it is a debt-laden company. Do you know that OXY cash flows are now so strong that it could repay all of its USD10 billion debts within this year if oil prices stay at USD100 per bbl? OXY share price dropped to as low as USD 10 in Mar 2020 and now trading at USD60, already 6x higher. I expect OXY share price to reach USD100 later this year or next giving Warren Buffet a 10x bagger. Debts are not scary if the company knows how to use it properly. Even Yinson needs to borrow heavily with debts now over RM8.0 billion, otherwise it will not be able to grow and bag new contracts. Anyway, YTL Power is a nett cash company now at holding level, with debts ring fenced at subsidiary levels.