Tuesday 4th November 2008 |
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The transaction will provide funds to pay debt for owner Babcock & Brown Infrastructure, whose stock has slumped 88% in the past 12 months as the global financial rout eroded the value of assets. The sale price values Powerco New Zealand at an EV/EBITDA multiple of 9.3 times, BBI said in a statement. The sale ascribes the business an enterprise value of $2.05 billion, it said.
Powerco is New Zealand's second-largest electricity and gas distributor after Vector. Last week, the Commerce Commission ordered the two companies to reduce pipeline charges amid concern they were using their monopoly position to gouge customers. Powerco's Tasmanian networks aren't included in the QIC sale.
"Powerco is a core, regulated utility," said QIC head of global infrastructure Ross Israel. "As a mature business we expect it to provide stable, long-term returns."
The transaction is expected to be settled in the first quarter of 2009.
BBI is managed by Babcock & Brown.
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