After much typing........
From the Financial Review, page 5:
Alinta faces survival threat.
By Andrew Burrell
The fate of Western Australia’s major gas retailer, Alinta, was hanging in the balance last night after is suffered an adverse ruling in a price dispute with its supplier, the Woodside Petroleum-led North West Shelf Venture.
Nagotiations between Alinta’s debt-laden owner, Babcock & Brown Power, and the North West Shelf Venture started on Tuesday after a ruling from an independent arbitrator, for High Court judge Michael McHugh.
Mr McHugh’s interim ruling is understood to have been highly unfavourable to BBP, which warned in its annual report last month that Alinta might be unable to continue as a going concern if it was forced to pay prices “significantly outside of BBP’s expectations”.
It is believed the NWSV demanded a contract price of around $8 per gigajoule, whereas BBP sought closer to $3. Major gas users in WA, including Alcoa and Verve Energy, have complained recently that producers are charging up to three times the prices of Victorian gas.
BBP remained in a trading halt last night.
Arbitration started in December after Alinta and the NWSV could not agree on how much the company should pay for it’s gas it delivers to 600,000 homes and businesses in WA.
The potential collapse of Alinta could open way for a trade sale or public float of the business, which was bought by BBP for $8 billion at the height of the stock market boom in 2007.
It would also place pressure on WA Premier Colin Barnett to bail out Alinta, although he vowed the week he would reject such a demand.
“If the stater were to do that, that money would simply flow through to Babcock & Brown and the banks who are owed money,” he said.
“That would be tantamount to some of the mistakes made by governments in the 1980s.”
Mr Barnett, who championed the privatisation of Alinta in 2000 when he was energy minister in the Court government, said Alinta remained a strong business in a growing market and blamed its woes on BBP’s financial predicament.
“I would hope out of this Alinta does end up in strong corporate hands where it has the capital for expansions and it has financial stability,” he said.
A spokesman for BBP, Jason Steed, said the company’s trading halt would end today and it would request a suspension if the dispute had still not been resolved.
“There hasn’t been a lot of sleep in the last 48 hours,” he said.
- Forums
- ASX - By Stock
- BBP
- Ann: BBP Market Update
Ann: BBP Market Update , page-56
-
- There are more pages in this discussion • 18 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Add BBP (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
SER
STRATEGIC ENERGY RESOURCES LIMITED
David DeTata, Managing Director
David DeTata
Managing Director
SPONSORED BY The Market Online