The Western Australian government is proposing a 51 percent IPO of state-owned electricity transmission and distribution network Western Power that is restricted to domestic bidders only.
Under the proposal, about 30 percent of the shares will be sold to Australian superannuation funds, while 20 percent will go to retail investors, including the employees of the grid company, according to Treasurer Mike Nahan. The state government will retain a 49 percent stake as the largest shareholder in Western Power.
“This model will address any national security concerns about foreign ownership. Western Power will not be foreign owned or controlled,” said Nahan. In August, the federal government rejected bids by China’s State Grid and Hong Kong’s Cheung Kong Infrastructure for the partial lease of Ausgrid, citing national security concerns. The Ausgrid stake was later acquired for A$16.2 billion by an “all-Australian” consortium comprising IFM Investors and AustralianSuper .
Primer Colin Barnett said that the state government hoped to raise A$11 billion ($8.19 billion; €7.7 billion) from the IPO of Western Power, A$8 billion of which will be used to repay debt. The government will set up a A$3 billion vehicle to fund infrastructure investments in schools, transport and rural electricity grid projects.
However, the proposal depends on the Liberal-National government winning the election next March. The opposition Labor party said it would not sell Western Power if it won the election.
Western Power has a network area of 255,063 square kilometres, serving over 1 million customers in the state. The Treasurer added that there would be no change in the cost of electricity for consumers and it would be business as usual for the grid company post-sale.