Alinta Energy is now understood to be set on selling all of the West Australian assets it has on offer, rather than just 80 per cent stakes, and the understanding is that offers have landed between $1bn and $1.5bn.
APA and Fortescue Metals are in the final stage of the race. There have been suggestions that Macquarie Capital and joint venture partner BP have fallen away.
There may also be some other players in contention, with possibilities being I Squared Capital, Atco or TransAlta.
It is understood most of the value of the offering is in the two power stations being sold by Alinta in WA – Port Hedland and Newman, a distillate power station with a battery storage system. The latter provides energy via a 220 kilovolt transmission line to the Roy Hill mine site in the Pilbara.
The Port Hedland station has five 42 megawatt gas-fired turbine units, providing electricity to the Pilbara region.
Some have estimated that the 11.8 per cent stake in the 1380km Goldfields gas pipeline, which transports natural gas from Carnarvon basin producers in the northwest of the state to Kalgoorlie in the Goldfields, is worth between $100m and $200m.
APA owns the remainder of the pipeline and has pre-emptive rights to buy Alinta’s interest.
The remote energy grid would be worth about $50m at best.
It is understood APA, advised by Barrenjoey and Morgan Stanley, is throwing everything at the contest and is the party to beat.
Final bids are understood to be due in the middle of next month.
Alinta is believed to have carried out management presentations to four parties in the second stage of the competition about three weeks ago.
But now there is some talk that only Fortescue, advised by Citi, and APA are left in the race.
Alinta’s main customers in the WA mining region are Hancock, BHP and Fortescue.
The offering has been described as highly complex.
Alinta is working with investment bank Goldman Sachs on its offer.
Analysts at Macquarie recently said APA had about $2bn of debt capacity, reducing the need to raise equity.
Buying the Alinta assets would lift APA’s capability in transmission management, with a transmission network of about 200km and scope for expansion and acquisition.
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