The Age’s Stephen Bartholomeusz had a typically thoughtful column
on Saturday on the $3 billion-plus in capital to be raised by two
forthcoming energy sector floats, Spark Infrastructure and SP Ausnet.
This represents a major selldown of equity, but not control, by the two
biggest Asian investors in Australia over the past decade, the
Singapore Government-owned Singapore Power and Hong Kong billionaire Li
Ka-shing’s Cheung Kong (CKI).
Add to that this morning’s reported $1.425 billion purchase of Southern Hydro by AGL, which in turn has announced a demerger and the departure of CEO Greg Martin, and you have another flurry of deals over assets that
were, in the main, first broken up and privatised by the Kennett
With three $1 billion-plus energy sector deals and a major demerger going down at the
moment, the only way to understand the flurry of activity is to refer
back to Crikey’s world famous power sell off
list, which tracks every power sector deal and many of the advisers
since 1992. The detail around the four big deals are not totally clear
so the entries are as follows:
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October 2005: AGL pays $1.425 billion for Southern Hydro’s renewable business of 737mW of power across Victoria, NSW and South Australia.
November 2005: AGL to demerge its energy and infrastructure businesses after Southern Hydro acquisition.
November 2005: Hong Kong conglomerate CKI to float 50% of
Victorian and South Australian electricity distribution businesses in a
$1.5 billion-plus raising through a float of Spark Infrastructure.
November 2005: Singapore Power to raise more than $1.5 billion
though the partial float of its largely Victorian gas and electricity
assets in a partial float to be called SP Ausnet.
The real challenge will be trying to work out who has made and lost
money on these latest deals, most of which relate to assets sold in the
original $30 billion Kennett government sell off of Victoria’s gas and
electricity assets. For instance, the record on Southern Hydro is as
November 1997: Infratil and NZ company Contact Energy pay $391 million for
Southern Hydro, Victoria’s small hydro power outfit.
1999-2000: Alliant Energy Corporation (AEC) trading as Alliant Energy
Australia (AEA) progressively bought Southern Hydro and now owns each of the
three partner companies that form the Southern Hydro Partnership, having bought
the Contact Energy share in 1999 and the Infratil share in 2000.
March 2003: Alliant Energy sells Southern Hydro to government-owned Kiwi
utility Meridian for $550 million which was close to what they paid in 1999 and
2000 to another Kiwi company Contact Energy and utility company Infratil.
Has the New Zealand taxpayer really made close to a $1 billion capital profit on today’s deal with AGL?