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Bakers in last big Qld energy sale
BAKER AND MCKENZIE advised AGL on its successful acquisition of Powerdirect Australia from the Queensland Government for $1.2 billion, the last part of the restructuring of the south-east…
Lawyers Weekly
BAKER AND MCKENZIE advised AGL on its successful acquisition of Powerdirect Australia from the Queensland Government for $1.2 billion, the last part of the restructuring of the south-east Queensland energy sale and distribution market.
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Since April last year, the sales of several state-owned energy assets have injected more than $3 billion into the State Government’s Queensland Future Growth Fund, which is being used to invest in a number of public projects.
Shortly before bids were lodged with the Queensland Government, AGL decided to fund the bid through a 15 per cent placement of shares involving a near $1 billion capital raising.
“A prospectus was needed for secondary trading of shares issued in the placement given AGL’s status as a ‘new’ listed company following the scheme of arrangement with Alinta last September,” said one of the lead partners, Chris Saxon.
“The full prospectus was prepared from scratch in seven days, an extraordinarily challenging timetable. This was one of the largest secondary raisings ever on the ASX.”
The sale of the state’s energy assets has been completed in four stages. This included the sale of the Allgas natural gas distribution network of Energex — the state utiltity serving the south-east of Queensland — to Australian Pipeline Trust for $521 million, the sale of around 830,000 former ENERGEX Retail electricity and LPG customers to Origin Energy for $1.202 billion, and the sale of former ENERGEX natural gas retail customers to AGL for $75 million.
In November last year, about 390,000 residential and small business customers in northern Brisbane and the Sunshine Coast were transferred from ENERGEX Retail business Sun Retail into Powerdirect Australia, to boost competition in the market.
The latest acquisition delivers AGL an additional 473,000 residential, small-to-medium enterprise, and industrial and commercial accounts.
The deal came just before the board of Queensland natural gas distributor Origin Energy rejected a bid by AGL to merge the two companies.
“The retail base is ideally suited as a growth platform in Australia’s fastest growing energy market due to its proximity to major wholesale energy loads,” said AGL managing director Paul Anthony in a statement.
“The dispersed geographic location of Powerdirect’s customer base provides a strong growth engine while also acting as a natural defence to competitors. We have accordingly valued the retail business at approximately $1,300 per customer.
“The acquisition strengthens our growth profile and adds meaningful scale to our new national integrated customer support systems being developed through Project Phoenix.
The transaction will be funded via an $882 million equity placement, with the residual paid for with debt.
Powerdirect Utility Services Pty Ltd is also included in the sale. This company is comprised of four small generation plants including biomass cogeneration plants in premises such as sugar mills. Powerdirect Australia sells energy directly to the customers and trades surplus energy into the electricity grid.
As well as Saxon, Bakers’ team included partner David Ryan, and lawyers David Holland, Frank Castiglia, Catherine Merity, Peter Davis, Simon Jenkins, Katherine Janus, Zoe Rafter, Alex Apoifis and David Quirk.
