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Infratil sells Australian energy assets for A$605 mln

Monday 15th September 2014

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Infratil, the infrastructure investor, has sold its Australian energy assets to Snowy Hydro for A$605 million, plus an adjustment for final working capital.

The Wellington-based company sold Lumo Energy and Direct Connect Australia after reviewing its ownership of the assets in May, and the deal is expected to complete at the end of this month, Infratil said in a statement late on Friday. It estimates net proceeds of between $646 million and $664 million, reflecting a gain on sale of between $343 million and $361 million. Sale costs are estimated to be $57 million, including a $44 million fee to Infratil's manager, HRL Morrison & Co.

"The sale of the Infratil Energy Australia assets and the recent divestment of Z Energy both show the strength and flexibility of Infratil's operationally-focused model," chief executive Marko Bogoievski said. "Following completion Infratil will assess the full suite of capital management alternatives against ongoing opportunities for new investment."

Lumo is the fourth biggest participant in the National Electricity Market with  540,000 customers in Victoria, South Australia, New South Wales and Queensland, while Direct Connect provides exclusive relationships with 3,200 real estate agents across Australia.

Snowy Hydro will become Australia's fourth biggest integrated electricity generator and retailer, with almost one million customers. The Australian company owns and operates the 3,950 megawatt Snowy Mountains hydro-scheme, and Victoria's 300MW Valley Power gas-fired station and 320MW Laverton North gas-fired plant. It also owns electricity and gas retailer Red Energy, with 400,000 customers in Victoria, South Australia and NSW.

Shares of Infratil fell 0.6 percent to $2.485 on Friday, and have gained 9.5 percent this year, outpacing the 6.8 percent gain on the NZX All Index over the same period.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond

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