NZ's meridian awaits Friday bids for Australian assets

SYDNEY - Indicative bids are due by Friday for the sale of Australian hydro and wind power assets owned by New Zealand's top state-owned electricity generator Meridian Energy, with strong interest expected, two sources close to the sale said on Wednesday.

The trade sale of Meridian's Australian assets, which bankers value at as much as A$1.5 billion ($1.59 billion), has attracted "enthusiastic interest" from a wide range of global companies, said a source close to the deal.

Potential buyers include Australia's top two energy retailers, The Australian Gas Light Co and Origin Energy Ltd, and Hong Kong-based power utility CLP Holdings , all of which made bids for the assets when they were acquired as Southern Hydro by Meridian in 2003.

Other bidders could include investment and advisory firm Babcock & Brown, which has been increasing its renewable energy investments, as well as Spanish building company Acciona , an underbidder in the recent A$788 million takeover of Pacific Hydro by pension funds manager Industry Funds Management.

Meridian is being advised by investment bank Credit Suisse First Boston on the sale of a portfolio which includes 15 hydro power stations with a combined capacity of 646 megawatts (MW) and a 96-MW wind farm in South Australia. Output of 25 MW is enough to light 250,000 light bulbs.

Final bids are expected by late October with the sale timetabled to close by mid-November.

Meridian purchased Southern Hydro from Alliant Energy in May 2003 for A$595 million and has since transferred four of its own hydro-electric stations into the company and commissioned the Wattle Point wind farm.

Meridian chief executive Keith Turner told Reuters in June that interest in the assets was widespread, stimulated by the successful takeover of Pacific Hydro and the potential value of carbon credits tradeable under the Kyoto Protocol to allow companies generating greenhouse gases to offset fines.

"We are certainly receiving interest from Europe, from Asia, including Japan, and from Australia," he said.

- REUTERS