Infratil pays $A7 million for majority stake in Perth Energy

By NZPA

Monday 29th January 2007

Wellington-based Infratil said today it had bought a stake in one of three electricity retailers in Western Australia for $A7 million ($NZ7.86 million).

Its Infratil Energy Australia (IEA) unit is buying 51% of Perth Energy Pty through the issue of new shares.

Largely owned by a handful of management and executives, Perth Energy was established in 1999 and has been trading profitably since 2005.

IEA chief executive Darryl Flukes, who will take up the position of chairman of Perth Energy, said the investment fitted perfectly with Infratil's growth aspirations in Australia.

Flukes said the Western Australian energy market had just been deregulated, but currently lacked contestable residential customers.

"It's very very early days compared to eastern states and New Zealand in terms of contestable customers."

One of the attractions of Perth Energy, which has 50 large customers, was a well-advanced project for a 90 megawatt gas plant.

"Certainly we're going to be well-placed with Perth Energy to be able to take on a larger customer base," he said.

"I can't say we've set a target for customer numbers, just as many as we can get while they remain profitable."

Perth Energy managing director Ky Cao said his company was pleased to have found a strong financial backer with experience in both retail and generation.

Perth Energy had no plans to market or install renewable generation, but most of its supply comes from the renewable source of landfill gas.

Infratil Australia was on the lookout for affordable generation assets to complement its growing eastern retail base, Flukes said.

"We've found that the prices at which existing plant has been changing hands we haven't been able to make that work. We're just finding it more effective to build rather than purchase at the moment."

Infratil had not identified any investment opportunities outside the energy industry.

Shares in Infratil, which recently upped its stake in energy retailer and generator TrustPower to 50.5%, were down 2c at $5.61.

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