Alinta is poised to book a windfall profit of more than $60 million after finally offloading its controlling stake in junior telco Uecomm.
It is understood Alinta has sold the 66 per cent stake to Australia's number two phone company, Optus, for about $115 million, two months after an attempt to offload the stake through an institutional book-build ended in embarrassing failure.
An announcement confirming the sale could be made as early as today, before Alinta's annual meeting in Perth. The company refused to comment yesterday but Uecomm put a trading halt on its shares as rumours swept the market the long-awaited deal had been done.
Alinta inherited the Uecomm stake last July as part of the takeover of the US energy giant's Australian assets, but it has never considered itself a long-term holder.
The stake is valued in its books at a written-down $50 million and investors would have been happy to see that recouped.
However, the company's share price has doubled over the past year on an improved outlook and financial performance after two horror years marked by big losses and a failure to meet revenue forecasts. Floated in late-2000, Uecomm shares fell from $1.90 on debut to as low as 9¢ in October 2001. They gained 2.5¢, or 7.3 per cent, yesterday to 37¢ on relatively heavy turnover before the trading was suspended.
Macquarie Equities Capital Markets is believed to have tried to realise 33¢ a share for the Alinta holding from the book-build, valuing the company at $111 million.
However, potential buyers are said to have offered much less, with Optus believed to have been interested only at about 20¢ a share.
Alinta chief executive Bob Browning said at the time that, though planning to exit Uecomm, Alinta was under no pressure to sell and the price offered under the book-build "was not sufficient to reflect the inherent value of Uecomm".
Last month, the broadband provider confirmed it was on track to deliver forecast revenue of between $70 million and $80 million for 2004, after revealing a 29 per cent jump in first quarter earnings on the back of a slew of new contracts.
The Melbourne-based company collected $15.5 million in revenue in the three months to March 31 to register a 29.2 per cent improvement on the first quarter of 2003.
The company's unaudited results showed earnings before interest, tax, depreciation and amortisation of $5.5 million, up from $3.4 million the previous year, to deliver a modest pre-tax profit of $800,000.
Analysts expect Alinta to use the money to reduce its increased debt levels resulting from the $1.84 billion purchase of US group Duke Energy's Australian assets, announced just three days after the failed Uecomm book-build.
Optus, which is owned by Singapore Telecommunications, is well placed to pick up the Uecomm stake, announcing just last week that strong growth in both revenue and margins delivered a net profit of $440 million for the year ended March 31.
Optus rang up total revenue of $6.36 billion for the 12 months, up 15 per cent on last year, and lifted margins 4.9 per cent to 29.3 per cent.
The only issue likely to come to shareholder scrutiny at today's Alinta annual meeting is approval for an issue of 200,000 options to Mr Browning as part of his performance package.
