POWER!!!! Fortescue Future Industries, page-2596

Hi Bamboocow,

Apologies for delay, I have been busy with work and not on this forum much of late.

As requested, Please see below for The Australian Article :

Twist in the tail of Alinta Energy contest

There could be a sudden turn of events in the contest for the Western Australia energy assets of Alinta.

Speculation is mounting that Macquarie may no longer be in the final stages of the competition and is weighing options to partner with another contender. One of the suggestions is that APA Group could be a company it is targeting to join forces with.

APA does not need Macquarie as its funding partner, but that’s not to stop the Australian investment bank from trying.

Final bids for Alinta are understood to be due in the middle of next month.

About three weeks ago, Alinta was believed to have carried out management presentations to four parties in the second stage of the competition.

But now there is some talk that only Fortescue Metals and APA Group are left in the race.

Working with Fortescue Metals is investment bank Citi, while APA Group is advised by Barrenjoey and Morgan Stanley.

Alinta is selling a stake of 80 per cent or more of a selection of assets.

These include its Newman Power Station and remote energy grid in the Pilbara that includes a gas and distillate power station with a battery storage system.

It provides energy via a 220 kilovolt transmission line to the Roy Hill mine site in the Pilbara region of Western Australia.

Also on offer is its Port Hedland Power Station with five 42 megawatt gas-fired turbine units providing electricity to the Pilbara region.

It is also selling its 11.8 per cent stake in the 1380km Goldfields Gas Pipeline, which transports natural gas from Carnarvon basin producers in the northwest of the state to Kalgoorlie in the Goldfields.

APA owns the remainder of the pipeline and has pre-emptive rights in place to buy Alinta’s interest.

Macquarie Capital was said to be working on an acquisition with BP, through the pair’s Asian Renewable Energy Hub, of which BP is a 40.5 per cent owner.

The venture has a project in the Pilbara that it hopes to supply renewable power to local customers.

It is working to support the development of 26 gigawatts of combined solar and wind power generating capacity.

Sources say Fortescue was initially out of the running after round one, but re-entered when it adjusted its offer.

They add that should suitors bid what the company has outlined in the information memorandum, the price would be well above $1bn.

Alinta’s main customers in the Western Australia mining region are Hancock, BHP and Fortescue.

The offering has been described as highly complex with respect to the contracts.

Alinta is working with investment bank Goldman Sachs on its offer.

Analysts at Macquarie Group recently said that APA has about $2bn of debt capacity, reducing the need to raise equity.

Buying the Alinta assets would lift APA’s capability in transmission management, with a network of about 200km of transmission and scope for expansion and acquisition.