Australia Government to Sell Stake in Snowy Hydro
Date: 08-Feb-06
Country: AUSTRALIA
The move follows an announcement by the New South Wales state government in December that it would sell its 58 percent stake in the company to raise an estimated A$1 billion (US$741 million).
"The Australian government views the sale of its minority 13 percent share as being in the interests of Australian taxpayers, and consistent with our strong support for the privatisation of government-owned electricity generators and increased competition in the electricity market, particularly in NSW," Finance Minister Nick Minchin said in a statement.
The remaining stake in Snowy Hydro, which provides 74 percent of the renewable energy available in Australia's mainland national electricity market, is owned by the Victorian state government. It is yet to decide whether it will sell its stake.
New South Wales is understood to be close to appointing a financial adviser for the sale, which is likely to be through an IPO and stock market listing.
Minchin and Industry Minister Ian Macfarlane said they would work closely with the NSW government, and would welcome Victoria's participation in the sale.
Snowy Hydro provides 74 percent of the renewable energy available in Australia's mainland national electricity market
In the year to June 30, 2005, Snowy Hydro Ltd reported earnings before interest, tax, depreciation and amortisation of A$273 million ($2.5 million) and a net profit of A$148 million.
Snowy Hydro Ltd owns and operates the Snowy Mountains Scheme, widely considered Australia's greatest engineering project, which consists of seven power stations and 16 major dams, connected by 145 km (90 miles) of tunnels and 80 kms of aqueducts.
It took 25 years to build and is capable of providing 3,756 megawatts of electricity.
Snowy Hydro Ltd also owns the 300 megawatt Valley power gas-fired power station in Victoria, and is currently building another 320 megawatt gas-fired power station in the state.
New South Wales is not the only government looking to monetise energy assets in 2006, with Queensland state also reviewing options for its electricity retailers Energex and Ergon before introducing full competition into their markets in 2007.
(US$1=A$1.35)
