EnergyAustralia has hired Morgan Stanley to conduct a review of its business, according to sources.
It is understood the investment bank may be looking for a strategic partner for the group, leading to a partial sale.
Sources believe that EnergyAustralia could be worth as much as $4bn.
The company supplies electricity and natural gas to more than 1.7 million residential and business customers throughout Australia. The speculation about a move to find a partner comes as energy retailers struggle to maintain strong profitability as a growing amount of renewable energy comes on to the electricity grid.
Among them is AGL Energy, which reports its results on Thursday and is in the process of demerging its coal-fired power generation unit, to be called Accel Energy.
EnergyAustralia was previously known as TRUenergy and is owned by CLP Group based in Hong Kong. Its assets include thermal coal, natural gas, hydro-electric, solar energy and wind power.
The Melbourne-based company was founded in 1995 and the group has made efforts to float in the past.
It announced last year that it was closing the Yallourn Power Station in mid-2028, four years ahead of schedule, and instead would build a 350 megawatt power-generating battery in the Latrobe Valley by the end of 2026. At the time, Yallourn produced about 20 per cent of Victoria’s electricity.
It comes after Meridian Energy last year sold its Australian operations to Shell and ICG for $729m.
It also comes as shareholders of South Australian electricity transmission network ElectraNet this week agreed to pay $1bn to increase their interest in the business by 33.5 per cent.
The shareholders include Sunsuper, Utilities Trust of Australia and The Infrastructure Fund. TIF is managed by Macquarie Infrastructure and Real Assets while Morrison & Co manages UTA.
The consortium, known as Australian Utilities Trust, purchased the stake from Malaysia’s YTL Corporation and will see it lift its interest to 53.4 per cent from 19.94 per cent.
The sale price equated to between 1.5 and 1.6 times its regulated asset base and was in line with recent asset sale values in the space.
Working for AUT are RBC Capital Markets and Johnson and Winter & Slattery.
It is understood that the existing shareholders fought off competition from other groups to buy the stake, with the APA Group thought to have been a suitor.
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