Deal: APA Group has acquired Basslink.

Value: $773 million

Area: Merger and acquisition

Key players: The Gilbert + Tobin team was led by co-head of M&A and corporate advisory partner Costas Condoleon, head of restructuring and insolvency partner Peter Bowden, and head of energy and infrastructure partner Alexander Danne.

Mr Condoleon and Mr Bowden were supported by lawyers Wes Bainbridge and Megan Lowe and drew upon the support of lawyers Becci Cartoon, Nikita Goodwill and Peter Hession from the restructuring and insolvency team at various pressure points in the complex transaction.

Meanwhile, Mr Danne advised on the complex negotiations with the state parties, with support from energy regulatory special counsel Geoff Petersen and lawyers Kestin Brown and Chi Han Yeo.

Banking partner David Kirkland advised on debt financing aspects of the transaction with support from lawyer Mark Nichol.

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Deal significance: APA Group is an ASX-listed energy infrastructure business.

Meanwhile, Basslink owns and operates a 370-kilometre high-voltage direct current electricity interconnector between Victoria and Tasmania. In November 2021, Basslink’s Singaporean owner, Keppel Infrastructure Trust, placed the business into administration, and the senior secured lenders at the time appointed receivers and managers to Basslink and its related entities who have had day-to-day control of Basslink’s operations since, a statement from Gilbert + Tobin said.

APA Group’s acquisition of Basslink included APA’s acquisition of “100 per cent of the secured bank debt, which had a face value of approximately $526 million in late 2021 and early 2022, and the entry into revised network services and operational arrangements with Hydro Tasmania and the state of Tasmania, respectively, to facilitate the operations of the interconnector and also provide APA with a pathway to convert Basslink to a regulated asset”, the firm said.

“G+T assisted APA in its strategy to secure this unique piece of critical infrastructure, with APA confirming its interest in acquiring Basslink through its acquisition of the secured debt. This involves APA participating in the receiver-led competitive process for the sale, restructure or recapitalisation of the business, which concluded with APA being selected preferred bidder.

“The complex transaction then involved APA entering into binding documentation with the receivers, which led to APA acquiring the shares in Basslink from the Cayman Islands-based holding company (to which the receivers were also appointed) and entering into a deed of company arrangement with the Ernst & Young administrators in relation to Basslink (the DOCA).

“The DOCA provided the platform for Basslink to exit external administration and continue trading, unsecured trade creditors to be paid in full and the ongoing employment of Basslink’s staff. The creditors of Basslink voted in favour of the deed of company arrangement at the second creditors’ meeting convened by the administrators of the entities on 18 October 2022.”

The firm continued: “As part of the transaction, complex contractual arrangements were negotiated and agreed with secured parties Hydro Tasmania and the state of Tasmania to facilitate the operations of the interconnector and provide a pathway to regulating the asset, as well as address historical matters and litigation relating to Basslink.”

Commenting off the back of the acquisition, Mr Bowden said: “It was a pleasure to advise APA Group on this significant acquisition of Basslink and be able to support APA throughout the multiple phases of the transaction.

“Under extremely complex circumstances and accelerated time frames, our leading restructuring + insolvency group drew on the expertise of wide G+T to team navigate APA through the acquisition process.

“In the midst of a challenging economic landscape, I am delighted that we were able to deliver a successful outcome in the administration of Basslink and for the creditors and other stakeholders, creating much-needed operational suitability for Basslink whilst bolstering APA’s infrastructure portfolio.”