Ann: APA responds to media speculation, page-3

This article from AFR

APA Group dusts off decade-old Basslink Interconnector playbook

AnthonyMacdonald and YolandaRedrup

Aug29, 2021 – 6.56pm

Gas infrastructureinvestor APA Group looms as a white knight for Tasmania and mainlandAustralia’s electricity markets, with the group positioning for thedebt-riddled Basslink Interconnector.

It is understoodAPA Group is assessing ways it could take control of the interconnector and theall-important contract with Tasmania’s Hydro Tasmania, potentially adding a keyAustralian electricity transmission asset to its portfolio of mostly gaspipelines.

Sources said APAGroup was looking closely at whether it could elbow its way into the box seatby striking a deal with Hydro Tasmania, which would leave Basslink’s existingowners and lenders with little choice but to sell to - or side with - theAustralian group.

Such a move wouldbe consistent with APA Group’s stated strategy to help expand Australia’s eastcoast power grid and provide energy security to the country’s biggest industrycustomers and communities. CEO Rob Wheals has consistently told investors hewants to build on what is already a proven Australian energy infrastructurebusiness and be part of expected changes to the country’s energy market.

An APA Groupspokesman declined to comment on Sunday.

APAGroup’s interest comes as Basslink, owned by Singapore’s Keppel Infrastructure,desperately needs a capital injection from its shareholder or a new whiteknight investor, or a deal with its lenders, to dramatically reduce thecompany’s debt.

TheBasslink Interconnector was designed to export excess hydro power from Tasmaniato mainland Australia, and take baseload power from Victoria back across theBass Strait to Tasmania.

Basslinkhad a $643.8 million loan from a syndicate of Australian and offshore banks viaa related entity, Premier Finance Trust Australia, that was due for repaymentby the end of last week.

Keppelhad Citi’s bankers in Hong Kong working to refinance the loan, however lendersreckon that fell flat with Keppel not willing the stump up more equity as wouldbe required.

Itwill be up to the directors of the Prime Finance Trust to explore otheroptions, including a recapitalisation or sale. Sharp-nosed distressed debt andspecial situations investors are known to be lurking.

Inthe middle of the stand-off is Hydro Tasmania and the Tasmanian government. TheBasslink Interconnector is a key piece of infrastructure for the state. It runsfrom Long Yang in Victoria across the Bass Strait to Tasmania, including via a290km undersea cable, and was set up to export Tasmanian hydro-generated powerand import base-load from Victoria when Tasmania was short of electricity.

Interestingly,it is not the first time APA Group has had a close look at Basslink. In 2007, it worked on a $1 billion-plus bid for the then UK ownedBasslink, in conjunction with Macquarie Bank. However it was outbid by Singapore’s CitySpring Infrastructure Trust, which later merged with Keppel.