Ann: ASSET: IFT: Conclusion of strategic review of Infratil Energy Australia

• Release Date: 15/09/14 08:30
• Summary: ASSET: IFT: Conclusion of strategic review of Infratil Energy Australia
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					IFT
15/09/2014 08:30
ASSET

REL: 0830 HRS Infratil Limited

ASSET: IFT: Conclusion of strategic review of Infratil Energy Australia

Infratil's Board announced today that it has concluded the broad strategic
review which commenced on 13 May and has agreed to sell Lumo Energy and
Direct Connect Australia to Snowy Hydro Limited for cash consideration of
A$605 million plus an adjustment amount for final working capital. The
transaction is unconditional and is expected to complete on 30 September
2014.

Infratil has owned the Australian businesses since 2004, during which time
Lumo Energy has grown to become the fourth largest participant in the
National Electricity Market ("NEM"), servicing over 540,000 customers in
Victoria, South Australia, New South Wales and Queensland. Direct Connect
Australia is the market leading utilities connections provider with exclusive
relationships with more than 3,200 real estate agents across Australia. The
combined businesses employ just over 600 people based primarily in Melbourne.
The portfolio includes a 163.4MW portfolio of diesel peaking generators in
South Australia and New South Wales and a power station development site in
Bamarang.

Snowy Hydro own and operate the 3,950MW Snowy Mountains Scheme, an integrated
water and hydro-electric power project located in Australia's Southern Alps,
the 300MW Valley Power gas-fired power station and the 320MW Laverton North
gas-fired power station both located in Victoria and are the parent company
of Red Energy, a retailer selling electricity and gas to around 400,000
customers in the Victorian, South Australian and New South Wales markets.

Snowy Hydro provides an array of financial hedge and insurance products to
participants in the NEM. They are a leading provider of peak, renewable
electricity to the NEM and a fully integrated Australian energy business with
an excellent track record in financial performance, engineering innovation,
workplace culture and business practices.  They currently employ over 650
personnel in Cooma, Jindabyne, Talbingo, Khancoban, Cabramurra, La Trobe
Valley, Sydney and Melbourne.

The combined businesses will create the fourth largest integrated generator
and retailer in Australia's NEM servicing nearly 1 million customers with a
complete portfolio of products and services.

Infratil is delighted with the outcome of the strategic review which saw
active participation from a wide range of domestic and international parties.
CEO Marko Bogoievski said "the sale heralds the start of the next chapter for
Australia's energy market and Infratil is very proud of the business we have
built to enable market consolidation of this size and scale."

Marko noted that the sale followed nine years of active management guiding
the business from start-up through to becoming a significant market
participant.  "The sale of the Infratil Energy Australia assets and the
recent partial divestment of Z Energy both show the strength and flexibility
of Infratil's operationally-focused model.  Following completion Infratil
will assess the full suite of capital management alternatives against ongoing
opportunities for new investment."

Paul Broad, CEO, Snowy Hydro said "this outcome is a win-win for the
customers and staff of both Lumo and Red. The two businesses are
complementary and will thrive within the Snowy Hydro group."

The final NZ$ proceeds are dependent on the amount of working capital as at
the completion date and the NZ$:A$ exchange rate. After sale costs, Infratil
estimates that the net proceeds will be in the range of $646 million to $664
million based on an NZ$ to A$ rate of 0.895. The carrying value of the
businesses reported in the March 2014 financial statements was NZ$275
million, and the reported gain on sale at completion date is expected to be
in the range of NZ$343 million to NZ$361 million. The sale businesses
reported a combined EBITDAF of NZ$61 million in the financial year to 31
March 2014. Sales costs in respect of the transaction are estimated at NZ$57
million, including an international portfolio incentive fee estimated at
NZ$44 million payable to Infratil manager H.R.L Morrison & Co under the terms
of the management agreement.

Marko Bogoievski
Chief Executive Officer
Infratil Limited
End CA:00255201 For:IFT    Type:ASSET      Time:2014-09-15 08:30:00