Credit Suisse finalises Enel sale to Inpex, shops Hoyts in final days

A takeover by UBS of Credit Suisse was hastily arranged by the Swiss government. Picture: AFP

In what is likely the final days of Credit Suisse’s existence, its investment bankers in Australia are busy tying up the loose ends when it comes to two deals – the sale of Enel’s Australia energy assets and cinema chain Hoyts.

Sources say that in the process of being closed out is a transaction for Japan’s largest petroleum and exploration company, Inpex, to buy a stake in Enel’s Australia operations.

Enel has been taking advice from Credit Suisse, and in the second half of last year the Italian electricity and gas manufacturer and distributor was understood to be short-listing bidders for a sale of a stake in its Australian renewable energy operations.

Suitors were offered the opportunity to buy in as a joint venture partner where they would have majority ownership in a deal that could be worth about $250m.

On offer was the existing operation, ready-to-build assets and a commitment for future development of assets at the point where they were ready to build.

Sources, however, believe that the transaction may have since been recut.

One party that was previously an interested buyer of the Enel Green Power renewable energy portfolio in Australia was John Laing, owned by Kohlberg Kravis Roberts.

But now the sale is down to the final stage, and DataRoom can reveal it is Inpex that is said to be in the box seat.

The Japan-listed Inpex, with a $22.5bn market value, has been in the market for additional renewable energy assets, and was looking to buy CWP Renewables last year.

CWP sold to the interests of billionaire Fortescue Metals chairman Andrew Forrest and has been a buyer of renewable energy assets globally.

Enel Group has the Bungala 1 and 2 solar plants in South Australia that were developed in conjunction with the Dutch Infrastructure Fund.

They have offtake agreements in place with Origin Energy.

In total, the Enel assets produce 309MW.

The Bungala 1 and 2 solar projects produce 137.7MW and 137.5MW respectively and its Cohun solar farm in Victoria operates with 34MW capacity.

Globally, Enel manages more than 1200 power plants on five continents and has assets in operation or under construction in about 21 countries.

Meanwhile, it is understood that China’s Wanda is only a seller of the cinema chain Hoyts if it can get offload the business for at least $900m.

While Credit Suisse has shopped Hoyts before, sources believe its bankers are having one last crack at a sale before the bank falls into the hands of UBS, which was recently forced by the Swiss government to buy its rival to prevent its collapse.

DataRoom reported that former owner Pacific Equity Partners had looked at the business, which is also being advised by Nomura, in 2021, after it revealed that a sale was then afoot.

Some believe that a buyer exists at a price of about $700m, but the Chinese owner is unlikely to part with the company for that amount of money.

In the past year, cinema sales have recovered strongly, and the group generated about $150m of annual earnings before interest, tax, depreciation and amortisation.

This was the amount that Hoyts was understood to be generating prior to the pandemic.

The pandemic wiped out about 70 per cent of its earnings, and there were expectations of making a recovery over the following two years, and hopes of returning to a triple-figure EBITDA number.

Dalian Wanda Group, controlled by billionaire Wang Jianlin, purchased Hoyts from Pacific Equity Partners in 2015 for what was thought to be a deal worth $US750m.

PEP had bought the cinema chain in 2007 for a price that valued the business at $440m.

Hoyts operates at least 430 screens across Australia and New Zealand, and rental machines in 650 locations, along with the Val Morgan cinema screen advertising operation which is the leading national supplier across Australasia.