Shenhua, AGL, ERM Power Shortlisted for Australia Power Asset
By Gillian Tan
China’s Shenhua Group, AGL Energy Ltd.AGK.AU +0.46% and ERM Power Ltd.EPW.AU +3.21% are among bidders shortlisted to buy the largest electricity generator in Australia’s New South Wales state, a person familiar with the matter said Tuesday.
Final bids for New South Wales state-owned Macquarie Generation, which is expected to fetch around 2 billion Australian dollars (US$1.9 billion), are due at the end of January, the person said.
Macquarie Generation owns and operates the Liddell and Bayswater thermal-coal fired power stations in New South Wales, which have a combined capacity of 4,640 megawatts. The power plants met a third of the state’s electricity needs in 2012.
ERM Power Chief Executive Philip St Baker confirmed it was on the shortlist. “At the right price, generation can increase financial returns and deliver significant vertical integration benefits,” he said in a statement.
A spokeswoman for AGL Energy declined to comment. A spokesman for Shenhua didn’t return a call for comment.
An initial bid by Shenhua adds to growing Chinese interest in Australian energy and utilities assets.
State Grid Corp of China., the world’s biggest utility by revenue, is awaiting approval from Australia’s Foreign Investment Review Board for its purchase of Singapore Power Ltd.’s Australian assets. They include a 60% stake in Jemena, which manages more than A$5 billion worth of pipelines and transmission networks, and a 20% stake in SP AusNet Ltd.SPN.AU +0.56%
In 2012, State Grid bought a 41% stake in South Australia state’s electricity transmission network ElectraNet and in February, held talks to buy another 25%.
Shenhua, which owns power plants globally with a combined capacity of 63,000 megawatts, counts its key Australian asset as the Watermark thermal coal project in New South Wales.
