bbw from bloomberg

Babcock Wind May Get as Much as $3 Billion for Assets (Update1)

By Ambereen Choudhury and Nicholas Comfort

June 18 (Bloomberg) -- Babcock & Brown Wind Partners, the Australian owner of wind energy projects, may get as much as $3 billion as Iberdrola SA and Union Fenosa SA consider buying some of its European assets.

First round offers were due on June 16, said three people with knowledge of the plan, declining to be identified as details are private. Madrid-based Union Fenosa is among companies and infrastructure funds which submitted offers, the people said.

Babcock & Brown Ltd., Babcock Wind's parent, rose in Sydney trading on optimism a sale may help satisfy bankers that it can repay A$2.8 billion in debt ($2.6 billion). The company is relying on the sale to restore investors' confidence after a stock rout cut its market value in half the past week.

Iberdrola is interested in the assets, though its priority is carrying out an existing investment plan, said a spokeswoman for the company in Madrid yesterday. Fenosa is following the process as part of its strategy to expand in renewable energy at home and abroad, a Fenosa official said in an e-mail. He declined to be identified.

Babcock, Australia's second-largest securities firm, said June 16 it expects first bids this week, and is confident it will sell the European wind assets by the third quarter of this year.

The Sydney-based firm's shares rose 6.9 percent to A$6.34 at 10:09 a.m. Babcock Wind declined 1.5 percent to A$1.62 after jumping 5.5 percent yesterday.

Renewable Energy

Babcock Wind, or BBW, said in February it may sell ventures in Europe, including the Enersis business in Portugal, to benefit from increased valuations for projects that aren't reflected in its share price in Australia. The company owns about 831 megawatts of wind energy generation capacity in Spain, Portugal, Germany and France. It hired Deutsche Bank AG and JPMorgan Chase & Co. to manage the sale.

Some bidders lodged offers for part of the portfolio, according to one of the people. Completion of the sale is likely by the end of the third quarter.

``Energy providers want to reduce their carbon dioxide emissions, and they're doing that by investing in renewable energy,'' said Ruxandra Haradau-Doeser at Bankhaus Metzler & Co. in Frankfurt.

Babcock Wind, one of 13 listed Babcock funds, said in the same month it's the world's fifth-biggest wind energy company in terms of installed capacity. Its parent Babcock in December 2005 bought Enersis for 490 million euros ($756 million) before selling half of it to the wind fund.

Acquisitions

Babcock Wind spent A$1.78 billion on acquisitions and new projects in last year's second half, boosting generation capacity about 67 percent.

RWE AG, Germany's second-largest utility, may also be interested, the people said. RWE Innogy spokesman Konrad Boecker, in Essen, declined to comment on whether the company bid last night. Anthony Kennaway, a spokesman for Babcock & Brown in London, declined to comment.

Scottish & Southern Energy Plc, the U.K.'s second-largest power producer, in January agreed to buy Irish wind farm operator Airtricity for 1.83 billion euros in cash, in addition to assuming debt. Bilbao-based Iberdrola Renovables SA, the world's biggest owner of wind-driven power plants, in December raised 4.48 billion euros in Spain's largest initial share sale.

To contact the reporters on this story: Ambereen Choudhury in London at [email protected]
Last Updated: June 17, 2008 20:13 EDT


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