Deals

Alinta receives bids to rival private equity approach

The stricken Australian electricity generator has received a number of trade bids, which will be weighed up against a private equity recapitalisation plan put forward by TPG Capital, Anchorage Capital and Oaktree Capital.

-

Alinta Energy, an Australian energy retailer, has received a number of bids from strategic trade buyers for its whole business and individual assets, the company said in a statement. These bids will compete against the recapitalisation plan put forward by a TPG Capital-led consortium at the end of August.

“The bids remain confidential, and only capable of acceptance subject to a number of terms and conditions including access to ‘black box’ due diligence information and consideration by lenders,” Alinta said in the statement.

The debt-laden company was approached by the private equity consortium, which comprises TPG Opportunities Partners, TPG private equity funds, Anchorage Capital and Oaktree Capital, at the end of August to undertake a partial debt-for-equity swap and a rights issue of around A$300 million (€218.4 million; $279.9 million), according to The Australian.

The plan, which would slice the electricity generator’s debt to A$1.55 billion from about A$2.8 billion, would also involve a revamp of Alinta’s management team. The consortium currently controls about 35 percent of Alinta’s A$2.6 billion in senior loan facilities, according to the newspaper.

Since June, stricken Alinta has reportedly been assessing a deleveraging process that includes an asset sale programme and other capital management options. UBS has been acting as the advisor to the company.

The Australian reported that the board of Alinta might prefer to sell the whole company rather than individual assets within the group, and this preference may have discouraged some potential buyers, including Origin Energy, APA Group and BHP Billiton.

Alinta could not be reached for comment by press time, but said in the statement that it expects to have discussions with its lenders about the trade bids and its deleveraging options over the course of this week.

Headquartered in Sydney, Alinta has interests in 12 power plants with installed capacity of 3,000 megawatts. The company also operates the largest integrated private gas and electricity retailer with over 580,000 customers in Western Australia.