CLP Holdings Limited (CLP) has reached agreement to sell EnergyAustralia’s entire interests in the Iona Gas Plant in the State of Victoria, Australia, for a cash consideration of A$1,782 million (HK$9,882 million). The purchasers are ultimately owned by Queensland Investment Corporation (QIC) consortium comprising the QIC Global Infrastructure Fund and existing QIC clients. QIC is a global diversified alternative investment firm owned by the Government of the State of Queensland and one of the largest institutional investment managers in Australia.
“We are pleased with the outcome of the transaction and the sale price, which reflects the quality of the asset and its status as an integral part of the gas supply chain,” said Mr Richard Lancaster, CLP’s chief executive officer.
“The sale is consistent with CLP’s strategy of restoring value to the business in Australia and EnergyAustralia’s approach of increasing its focus on customers, improving operational efficiency and optimising its portfolio of assets. We are continually looking at ways to enhance shareholder value and optimise the long term sustainable value of the business, and will continue to review our assets on this basis.”
The proceeds will go towards repaying shareholder loans extended by CLP Group to and third party debts due by EnergyAustralia, as well as meeting general capital expenditure requirements as needed under EnergyAustralia’s transformation plan.
In order to supply gas to its customers, EnergyAustralia will enter into a long term Gas Storage Services Agreement with the purchasers for the provision of gas storage services to EnergyAustralia at market derived rates.
Completion of the sale is conditional upon receipt of certain regulatory approvals and is targeted to be completed by the end of 2015.
The Iona Gas Plant consists of a gas processing and compression plant and underground gas storage reservoirs located in Victoria, Australia. It provides gas injection, storage and withdrawal services to both the Victorian and South Australian gas markets. The storage capacity of the Iona Gas Plant is 23.5 petajoules and gas can be supplied to the market at rates of up to 500 terajoules a day.