Lloyd Morrison's Infratil has expanded its Australian energy portfolio with the purchase of a controlling stake in electricity retailer Perth Energy.
Infratil Energy Australia (IEA) has acquired A$7 million ($7.78 million) in new Perth Energy shares, giving it a 51 per cent holding.
Perth Energy, one of three
electricity retailers in Western Australia, will use the money to fund growth.
IEA chief executive Daryl Flukes, now Perth Australia's chairman, said the acquisition fitted perfectly with Infratil's growth aspirations in Australia.
"We're much more comfortable going into Western Australia with an existing management team who are starting from a very small base, as did Victoria Electricity over in the east."
Infratil has been bullish on its prospects in the Australian energy market due to increasing deregulation.
IEA-owned Victoria Electricity, for example, has over 115,000 customers, but as markets were deregulated in Queensland and New South Wales, Infratil believes that figure could rise to 300,000 to 500,000 in five years.
A small retailer, Perth Energy currently sells about 50MW of power to about 60 large commercial and industrial customers.
It is hoping that further deregulation of the electricity sector in Western Australia will allow it to begin selling power to residential customers within two to three years.
Perth Energy has no generation of its own, but has plans for a 90MW gas-fired generation plant at Kwinana, south of Perth.
The plant is likely to cost about A$90 million. Perth Energy has an arrangement with a financial institution to provide 65 per cent of the project's funding requirements.
According to Infratil's website, the balance will be provided through additional equity from Infratil. Infratil shares closed 2c up at $5.65 yesterday.
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* Infratil has purchased a controlling stake in Western Australia's Perth Energy for A$7 million.
* It hopes to build Perth Energy's customer base as Western Australia's electricity sector is further deregulated.
* Infratil will probably put a further A$30 million into Perth Energy to fund a new gas-fired power plant south of Perth.
