Author: tfwee
SPAusNet – SGX
Acquisition of Alinta Assets from Singapore Power International
SP AusNet (ASX Code: SPN) today announced it has agreed with Singapore Power International (“SPI”) to acquire the Alinta assets being purchased by SPI. SP AusNet will acquire the assets for $8,142 million, which is the price paid by SPI1, plus transaction costs and holding costs between the time of the acquisition by SPI and completion of the sale to SP AusNet.
The acquisition is conditional upon SP AusNet obtaining securityholder approval, securing the necessary funding, final documentation, completion of the restructure of Alinta following the scheme of arrangement and any applicable consents or approvals.
The Alinta assets to be acquired comprise:
• The NSW Gas Distribution Network;
• The Alinta Vic Electricity Network;
• A 34.1% stake in the United Energy Distribution Network;
• The Eastern Gas Pipeline;
• The Queensland Gas Pipeline;
• The VicHub;
• A 50% stake in the ActewAGL distribution joint venture;
• A 7.6% stake in TransACT; and
• The Eastern States Asset Management business.
The acquisition will complement SP AusNet’s existing portfolio of high quality energy transmission and distribution assets, substantially increase SP AusNet’s scale and presence across the eastern states of Australia and provide access to higher growth assets.
SP AusNet’s Managing Director, Mr Nino Ficca said, “These assets provide a strong fit with our existing portfolio of energy transmission and distribution assets. The opportunity to expand our operations outside the geographic boundaries of Victoria, as well as into the area of gas transmission, is something that we have been working on for some time.”
“A successful acquisition by SP AusNet will create the largest energy transmission and distribution business in Australia with high quality regulated assets and additional growth potential from its pipeline assets and asset management capability. SP AusNet will be one of the largest infrastructure businesses listed on the ASX.”
Acquisition Highlights
• Transformational acquisition positioning SP AusNet as the leading utility business in Australia, with operations in Victoria, NSW, Queensland and the ACT.
• Revenue upside underpinned by predictable cash flows from regulated assets and exposure to higher growth assets and asset management services.
• The addition of significant gas distribution and transmission assets into SP AusNet’s portfolio will further expand and diversify existing capabilities.
• Combined resources across Australia will provide a key strategic platform for SP AusNet to continue developing a competitively focussed services business and provide access to additional skilled resources in a constrained labour market.
• Synergy benefits are expected to be achieved from a combined overhead pool and more
efficient operations.
The acquisition will be funded by a mixture of debt and equity. It is currently proposed that this will include a rights issue to all securityholders. It is SPI’s intention to maintain its 51% holding in SP AusNet.
SP AusNet was established as Singapore Power’s investment vehicle for electricity and gas transmission and distribution assets in Australia and New Zealand. This transaction demonstrates Singapore Power’s commitment to growing SP AusNet and its alignment with all SP AusNet securityholders.
It is intended that the assets will be incorporated into SP AusNet’s existing structure and that the management services arrangement between SPI and SP AusNet will be extended to cover the assets and businesses to be acquired.
Independent Review Process
The offer received from SPI was reviewed by the Independent Directors’ Committee (“the Committee”) comprising Mr Ian Renard, as Chair, Mr Tony Iannello and Mr Martyn Myer. The Committee was assisted by Pacific Road and other external legal and accounting advisers.
The proposed acquisition has been recommended by the Committee and subsequently approved by the Board of SP AusNet.
Next Steps
The acquisition is subject to the approval of the securityholders of SP AusNet at a general meeting. SPI will not be able to vote on the resolution at this meeting.
SP AusNet is seeking to hold the meeting of securityholders before the end of the year. Securityholders will be provided with an explanatory memorandum which will contain all information relevant to the transaction. The explanatory memorandum will include financial forecasts together with information regarding the expected impact on SP AusNet’s yield, gearing and credit rating. An independent expert’s report on the transaction will also be provided to securityholders.
The Directors maintain the full year distribution guidance for 2007/08 and are of the view the acquisition will add to the long term value of SP AusNet.
1 Subject to finalisation of adjustments and assumption of liabilities at the time of the acquisition by SPI.
Source : SGX
SingTel – OCBC
Signs of weakness?
– SingTel staged a rally over the last 4 weeks that is showing signs of weakness at this juncture.
– First sign of weakness was observed as the price rallied on the back of declining volume.
– Second sign of weakness was observed by the price break above the 2nd of Feb 07 high of S$3.70 on 14th Sept which was accompanied by only a marginally higher volume. This indicates the breakout might not be sustained and could very likely pull back in the weeks ahead.
– Yesterday’s strong price move up seemed to indicate that the uptrend could head up a little more before we witness a reversal, given that RSI, stochastic and MACD have all broken above their downtrend lines.
– However, we are not ignoring the weak volume on the rebound and price breakout. We advocate caution and lightening up on positions as the rebound continues. Resistance set at S$4.00.
– We anticipate a reversal in trend in the weeks ahead. 1st support is set at S$3.60 and subsequent support is set at S$3.32.
SMRT – BT
SMRT queries council’s ROTA fare hike decision
(SINGAPORE) Singapore’s SMRT, which operates most of the city-state’s subway system, said yesterday that its relatively high return on assets was due to prudent management and should not be used as a reason to keep train fares unchanged.
‘By using ROTA (return on total assets) as a criterion not to grant a train fare adjustment, it could be interpreted as a disincentive for good performance,’ SMRT deputy president and chief operating officer Yeo Meng Hin told Reuters in an e-mail.
Mr Yeo’s comment followed the Public Transport Council’s (PTC) move last week to reject its application to raise train fares, citing SMRT’s ROTA of 11.4 per cent last year, which was higher than that of other transport companies in the region.
SMRT said it was ‘reviewing the matter’ when asked if it planned to appeal the council’s decision or seek clarification as to what constituted an acceptable return on assets.
According to the council, SMRT’s return on assets exceeded those of companies, such as Hong Kong’s Transport International Holdings and MTR Corp and Singapore-based SBS Transit and Singapore Airlines, which ranged from 4 to 9.7 per cent.
SMRT also noted its high return on assets was partly due to its asset-light structure as it did not own the city-state’s subway stations and rail tracks. The company is, however, required to maintain these assets and pay the government a licence fee of one per cent of gross annual fare revenue.
Singapore allows transport operators to apply for fare increases each year using a formula based on changes in the consumer price index and average monthly earnings in the city-state minus 0.3 percentage point for productivity increases. — Reuters
MIIF – BT
MIIF sells tank storage unit for 89m euros
(SINGAPORE) Singapore-listed Macquarie International Infrastructure Fund (MIIF) said yesterday that it will sell a tank storage unit to a sister fund for 89 million euros (S$186 million).
MIIF said in a statement that it will sell the unit, which represented 10.5 per cent of its portfolio by value, to LODH Macquarie Infrastructure Fund. The company had earlier called for a trading halt for the announcement, which was delayed due to a technical problem.
Proceeds from the sale would be used to repay debt, in line with the fund’s strategy to ‘progressively move its portfolio of assets to be more focused on Asian infrastructure’, MIIF said.
It said on Aug 29 that it sold a 3.2 per cent stake in Brussels Airport for about $110 million. The managers of both MIIF and LODH Macquarie are owned by Macquarie Bank , Australia’s top listed investment bank. — Reuters
SingTel – BT
SingTel sees smaller growth in revenue
(SINGAPORE) Singapore Telecommunications, South-east Asia’s largest telco, said yesterday that it expects revenue in the fiscal year ending March 2008 will grow at a single-digit rate and that free cashflow will decline slightly.
In a presentation posted on the stock exchange, chief executive Chua Sock Koong said that revenue at SingTel’s Australian unit Optus would grow between 2.5 and 3 per cent while earnings contribution from regional mobile firms would grow at double-digit rates.
The company also has set a target of double-digit growth for underlying earnings in the medium-term, according to the presentation, which will be delivered at a CLSA conference in Hong Kong today.
Last month the company said it expected revenues to grow by more than 5 per cent in 2008, driven by rising mobile phone and broadband subscriptions. — Reuters