QIC has given its bankers at Barrenjoey the A-okay to kick off an auction for its 33 per cent stake in PowerCo, the biggest electricity distributor and the second-largest in gas across the ditch.
A 12-page flyer is now in front of investors, telling them to brace for a traditional two-part process with an IM, preliminary financial model and a regulatory due diligence report ahead of non-binding indicative bids.
PowerCo made $NZ263 million in EBITDAF for the 2023 financial year from its three units: electricity distribution, gas distribution, and its unregulated business including transmission services. That’s a $3.1 billion regulatory asset base. Sources said Hong Kong billionaire Li Ka Shing’s CK Infrastructure Holdings is expected to take a look, although it would have to fight off New Zealand’s Overseas Investment Office given it already owns Wellington Electricity. PowerCo’s two other existing shareholders – Australian Retirement Trust and Dexus – hold pre-emption rights and would be thinking hard about what they want to do with their stakes.
Barrenjoey’s five-point sale pitch talked up PowerCo’s status as a scarce regulated asset, with stable and predictable cashflows. Its regulated asset base growth would be supported by New Zealand’s energy transition, while the unregulated business is ripe for future M&A, it said.has co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories.
QIC Auction Stake Powerco Electricity Distributor Gas Barrenjoey Investors IM Financial Model Bids EBITDAF Regulatory Due Diligence CK Infrastructure Holdings Overseas Investment Office
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