Alinta Energy appoints retail brokers in preparation for November IPO

The Port Augusta power station operated by Alinta Energy. (Picture: Christopher Russell)

Alinta Energy has appointed Bell Potter, Morgans and Evans and Partners as retail brokers for its $3.3 billion-plus IPO. Another Perth based firm will also join the team of retail brokers in the weeks ahead of the November listing.

It comes after Goldman Sachs, UBS and Macquarie Capital were appointed as joint global co-ordinators and Credit Suisse and Morgan Stanley were appointed joint lead managers.

Brokers for a co-lead manager role to handle the retail component of the offering pitched for a role in recent weeks.

As previously reported in The Australian’s Data Room column the float of Alinta will likely raise between $1bn and $2bn in delivering a valuation between $3.3bn and $5.2bn.

Alinta, which counts TPG Capital as a shareholder with between 20 and 30 per cent of the business, promises to be the biggest float of the year.

The company is seen likely to ensure it has a ‘triple B’ rating upon listing and on that basis would likely raise somewhere between $1bn and $2bn given the company holds about $1.2bn worth of debt.

Alinta’s 2016 forecast earnings before interest, tax, depreciation, amortisation is said to be about $370 million and the company has aspirations to float at a price that equates to between nine and 14 times that number.

The expectation among some industry experts is that Alinta’s vendors will likely achieve just under $4bn for the business.

It comes after a consortium, including AGL Energy and the APA Group, previously offered $3.5bn for the energy provider, as revealed by DataRoom, but was knocked back by adviser Lazard and the vendors on the grounds the price was too low.

The argument is that Alinta is worth more than AGL because a larger amount of its revenues are contracted, with higher margins on its retail business, which makes up about half of its earnings, and a more lucrative dividend payment of between 5 per cent and 7 per cent.

However, sceptics say the listed AGL is a far superior operation in terms of its diversity of revenue and critical mass in retail.

Alinta has six contracted power assets — three in Western Australia, one in NSW, one in Queensland and another in New Zealand — with capacity to drive further growth. On the east coast, the share of the retail market is about 2 per cent, compared to the west, where it has an 85 per cent market share.