Analysts say Origin has cash to buy Alinta assets

SYDNEY - Origin Energy, the Australian electricity and gas retailer that has about A$3.7 billion ($4.5 billion) of cash and undrawn debt, may acquire Alinta Energy assets, analysts said.

Origin is "well placed" to buy the Braemar power station in southern Queensland, which may be worth as much as A$500 million, Sandra McCullagh, an analyst at Credit Suisse in Sydney, wrote in a report yesterday.

Alinta, the Sydney-based power generator, hired Lazard as an adviser to study proposals to reduce debt, including asset sales, the company said in April.

Origin, also based in Sydney, has options for deploying cash, such as buying New South Wales state electricity assets and increasing its stake in New Zealand power company Contact Energy, Credit Suisse said.

Contact is currently half-owned by Origin.

Buying Alinta's gas and electricity retail operations in Western Australia is an "attractive" possibility for Origin that would add customers, Goldman Sachs JBWere said.

Other analysts said that was providing Origin could extend gas contracts, sign new ones or discover reserves.

The Goldman Sachs JBWere analysts said they did not believe Origin had bought some of Alinta's A$2.6 billion of debt.

Tim Scott, a spokesman for Origin in Sydney, said the company did not comment on market speculation.

Alinta has interests in 12 operating power stations, while its gas and electricity retailer in Western Australia has more than 580,000 customers, according to its website.

- BLOOMBERG