The New South Wales Government has announced the sale of a stake in the state’s electricity distribution network Ausgrid for $16.189 billion to AustralianSuper and IFM.
It comes after two of the nation’s biggest superannuation funds last month emerged with an unsolicited bid for a 50.4 per cent interest in a long-term lease of the operation.
At the time, DataRoomrevealed that the offer was at least $10bn.
The sale is likely to spark further controversy among other rival infrastructure investors that were eager to compete for the asset, including Hastings Funds Management, Queensland Investment Corporation and GIP.
The $100bn AustralianSuper, one of the country’s biggest super funds, and super fund-owned IFM Investors represents a more politically palatable deal for the NSW and federal governments.
In a press statement today, Premier Mike Baird said the transaction would deliver gross proceeds of $16.189bn to the state and would help to fund critical infrastructure projects as part of the government’s $20bn Rebuilding NSW plan.
“This is another excellent result for the people of NSW after our successful $10.258 billion lease of TransGrid,” Mr Baird said.
“Our poles and wires transactions are unlocking billions of dollars to fund new schools, hospitals, public transport and roads that will make a real difference to peoples’ lives.”
Treasurer Gladys Berejiklian said the successful unsolicited proposal by IFM Investors and AustralianSuper was thoroughly assessed by government agencies and financial advisers, within the strictest probity requirements, and found to be unique and delivering value for money.
The transaction will not require Foreign Investment Review Board approval.
The Price Commissioner, Professor Allan Fels AO, has signed off on the Ausgrid transaction.
The consortium has also signed the Electricity Prices Guarantee which confirms total Ausgrid network charges will be lower in 2019 than they were in 2014.
The NSW Government will retain 49.6 per cent of Ausgrid and will have an ongoing role as the lessor of the business and an investor.
In addition, the State will continue its roles as licensor and safety and reliability regulator of Ausgrid. Ausgrid will also continue to be regulated by the Australian Energy Regulator which determines network prices.
Early last month, Scott Morrison blocked the sale of Ausgrid to Chinese and Hong Kong buyers on national security grounds.
The Chinese government-owned State Grid Corp had offered more than $12bn and Hong Kong-listed Cheung Kong Infrastructure group was offering up to $16bn for the 99-year lease.
The new offer was previously described as financially compelling and one that would not require approval from the Foreign Investment Review Board.
Macquarie Capital is advising IFM and Australian Super, while UBS and Deutsche is advising the state government.
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