Alinta IPO aims at $950m war-chest

SYDNEY - Alinta, Western Australia's biggest natural gas retailer, plans to sell A$868 million ($954 million) of shares in an initial public offering of a gas pipeline and power plant unit to raise funds for expansion.

Alinta will get a one-time, pretax gain of A$150 million and increased earnings, the Perth company says.

It will manage the unit in Australia and keep a 20 per cent stake.

Another 20 per cent of the stock will be offered to Alinta shareholders, customers and employees.

Chief executive Bob Browning said he would use the cash to invest in water supply businesses and overseas acquisitions.

Share sales in energy and utility companies in Asia tripled to US$14.4 billion ($20.5 billion) last year, according to Bloomberg data. State-owned Singapore Power is planning an IPO for its A$6 billion business in Australia, where the Government expects energy demand to grow 2.1 per cent a year until 2020.

"There has been strong appetite for this type of asset in recent times," said Michael Smiddy, a utilities analyst at Commonwealth Securities in Melbourne. "The key will be what price they can get it away at."

Alinta acquired Duke Energy's Australian and New Zealand business in April last year for US$1.24 billion. The unit, known as Alinta Infrastructure Holdings, would be worth A$2 billion including debt, the company said yesterday.

"We'll end up with a nice chunk of cash to enable us to go out and look for acquisitions," Browning said.

Shares in Alinta fell 8Ac, or 0.8 per cent, to A$10.35 after the company also reported a 12 per cent decline in first-half profit. The shares had earlier risen to a record A$10.70.

The share offer will be underwritten by Zurich-based UBS, the leading manager of share sales in Australia and New Zealand this year.

Alinta declared an interim dividend of 21Ac, up from 15Ac in the first half last year.

- BLOOMBERG