The buyer, Australian Utilities, is already a stakeholder in ElectraNet with an interest of nearly 20%
ElectraNet operates a high voltage electricity transmission system in South Australia. (Credit: Michael Schwarzenberger/Pixabay)
Malaysia-based YTL Power International has agreed to sell its 33.5% stake in ElectraNet, an Australian electricity transmission company, to Australian Utilities, the trustee for the Australian Utilities Trust, for A$1.02bn ($736.3m).
Australian Utilities already holds a stake of 19.94% in the electricity transmission operator. The remaining 46.56% stake in ElectraNet is held by the State Grid Corporation of China.
The underlying providers of capital and unitholders of Australian Utilities are Utilities Trust of Australia, The Infrastructure Fund, and the Sunsuper Superannuation Fund.
ElectraNet owns and operates A$2.5bn ($1.8bn) worth of transmission assets in South Australia.
Its high voltage electricity transmission system, which is under a lease for 200 years, supplies power produced by regional generators and interstate sources over long distances to metropolitan and regional areas.
The South Australian transmission network of the company consists of 97 high voltage substations and nearly 5,900 circuit kilometres of transmission lines spread over a total area of 200,000km2.
YTL Power Group managing director Dato’ Yeoh Seok Hong said: “This transaction presented us with the opportunity to realise gains from a mature investment, further optimise the balance of assets in our business portfolio and increase the flexibility to deploy our cash reserves towards viable new ventures that complement our existing businesses.
“These include, in particular, new investments in solar energy and other renewables, in line with our shift towards more sustainable energy solutions moving forward.
“The timing for divestment proved optimal in light of the attractive valuation of regulated utility assets and strong investor interest.”
YTL Power had purchased a stake of 33.5% in ElectraNet in 2000 for A$58.5m ($42m). The deal at that time marked the company’s first foray outside Malaysia.
Subsequently, the Malaysian group expanded its international utility portfolio, which includes Wessex Water in the UK and YTL PowerSeraya in Singapore.
The sale of the stake in ElectraNet will help YTL Power realise proceeds of around RM2.215bn ($529.3m) upon closing of the deal, which is subject to meeting of preceding conditions.