CHANG, PISTILLI & SIMMONS (CP&S) continued its work for APA Group (APA) — formerly Australian Pipeline Trust — in its $170 million purchase of DirectLink, one of only two electricity transmission links between the New South Wales and Queensland power grids.
APA bought companies operating the assets as a joint venture, including Canadian corporate groups. CP&S said it advised APA on all aspects of the transaction, which was conducted through a competitive bid process.
The deal was finalised at the end of last month, after the purchase agreements were signed in December 2006.
“We continue to build on our extensive expertise in this sector having acted on the acquisition of Murraylink electricity infrastructure assets, the only other asset of this type sold in recent years,” said founding partner of CP&S Mark Pistilli.
Murraylink connects the South Australian and Victorian electricity grids. APA bought Murraylink HQI Australia Pty Limited and SNC-Lavalin Investment Australia Pty Ltd, the owners of the Murraylink electricity transmission, for $153 million in March last year. This included the 180-kilometre underground high voltage direct current cable interconnector between Berri in South Australia and Red Cliffs, near Mildura, in Victoria.
This purchase was the first significant purchase by APA of a non-gas transmission asset.
Partner Jason Mendens led a team of lawyers on the deal including Guy Miller, Fiona Lovell and Andrew Henscher.
There are also interconnectors linking NSW and Victoria, and Victoria and Tasmania, allowing those states to participate in the national electricity market.
“DirectLink’s transmission assets are recently built, long-life assets with low staff and maintenance requirements. APA will use the skills and synergies gained from managing Murraylink to achieve cost savings,” said APA managing director Mick McCormack.
“Our experience in running Murraylink and now DirectLink provides us with scope to consider pursuing similar assets which meet our investment criteria.”
At the end of last year, National Grid Australia — the owner of the latest interconnector to be set up, and the longest in the world, the Bass Link between Tasmania and Victoria — said it would sell the $780 million interconnector to focus more on electricity and gas businesses in the US and the UK.