“The transaction will deliver gross proceeds of A$10.258 billion which will help fund a raft of infrastructure projects across the state”, New South Wales Premier Mike Baird said in a statement.
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The part- lease of distribution network Ausgrid will be offered next.
China’s State Grid, in a consortium with locally-listed Macquarie Group Ltd, had foreign investment clearance and was widely considered the bid favourite despite concerns about the security of a network that carries sensitive government data.
The NSW Premier described the outcome as “stunning” and it follows the sale in 2013 of Port Botany for $5.07 billion which has prompted other deals including the Victorian government putting the much larger Port of Melbourne on the block.
Operationally, Spark’s expertise in running networks in Victoria and South Australia – Powercor, CitiPower and SA Networks, it has a 49 per cent stake in each – is central to the consortium’s bid.
It beat rival bidders such as State Grid of China and Canadian and Australian pension funds.
As for the government’s advisers UBS and Deutsche Bank, disclosure on the NSW tender website “estimated” they would each earn $17.5 million for their work on all three electricity transactions. Meanwhile, Hastings Fund Management has 20 per cent, while Kuwaiti investors have 20 per cent and Spark Infrastructure has 15 per cent, according to the Australian government. AustralianSuper also submitted an offer with Canada Pension Plan Investment Board and Borealis Infrastructure Management Inc., the people said.
“This was an incredibly tight race with many consortiums all the way to the finish line”, Baird told journalists on Wednesday morning.
According to the ABC, final bids for the 99-year Transgrid lease were received on Monday, with the successful bidder to be announced on Wednesday. Federal Treasurer Scott Morrison last week blocked the sale of the nation’s largest landowner to an overseas buyer, while the federal government has increased scrutiny of foreign acquisitions of agricultural land. The new Labor government subsequently scrapped the sales.
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NSWEN has also signed an electricity price guarantee as a part of the deal, which intends to make sure that total network charges will be lower in 2019 compared to the charges in 2014.
