Meridian interested in Australian hydro purchase

By NZPA

Tuesday 4th February 2003

State-owned generator Meridian Energy is among seven companies reported to be interested in buying a $A450 million ($NZ489 million) hydro generator in Victoria.

Meridian spokesman Alan Seay said the company was looking at Southern Hydro's business, although the sale process was at an early stage.

"We've already got a small foothold in Australia, and we're looking at this," Mr Seay told NZPA.

The company's investments in Australia include five "very successful" small hydro generators, as well as proposed wind generation, he said.

Meridian, which posted an $84 million net profit last year and has an asset base of $2.6 billion, said in its 2002 annual report that it had established a solid base in Australia.

"Value of Australian investment has exceeded our initial expectations on a discounted cashflow basis.

"Our experience in that market is helping us create new ideas for our New Zealand operations."

Final bids for Southern Hydro's stations, which have a total output of 500 megawatts, were understood to be due in mid-March.

Contact Energy, New Zealand's largest listed power company, was reported yesterday to also be interested in Southern Hydro.

A spokesman for Contact Energy said the company did not comment on speculation.

Contact Energy, which previously owned 27.7 percent of Southern Hydro, said in December it would continue to look for growth opportunities in Australia after it was unable to purchase assets from NRG Energy.

Other companies to express interest in acquiring Southern Hydro included Australian Gas Light Company, Origin Energy and Hong Kong generator CLP Power.

Southern Hydro is being sold by Alliant Energy (Australia), a unit of United States power giant Alliant Energy Corp, and has been valued by industry sources between $A400 million and $A450 million.

Southern Hydro, which was sold by the Victorian state government in 1997 for $A391 million, has 10 power stations in Victoria representing about 6 percent of the total state generation capacity.

Alliant's Australian managing director previously said the company was off-loading the asset because it was unable to provide the capital for the many growth projects and business initiatives that Southern Hydro has developed.

Alliant also has a 19.1 percent stake in Tauranga-based TrustPower.

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