Local-led consortium pays $5.6b for Australia's Endeavour Energy

The consortium will acquire a 50.4% interest in a 99-year lease on the business, which operates a network spanning 24,800 square kilometers. The NSW government will retain the outstanding 49.6% stake. The deal is said to include the assumption of A$5.5 billion in debt held by Endeavour, which the consortium will seek to refinance.

Macquarie Infrastructure & Real Assets will own 30.16% of the acquisition vehicle, with AMP Capital – which is acting on behalf of REST Industry Super – taking 25%, thereby ensuring Australia-based entities hold a majority. British Columbia Investment Management Corporation and Qatar Investment Authority (QIA) will hold 25% and 19.84%, respectively.

Endeavour supplies electricity to 2.4 million people across Sydney’s Greater West, the Blue Mountains, Southern Highlands, the Illawarra and the South Coast. Its network is made up of more than 416,000 power poles, 185 major substations and 32,000 distribution substations connected by 47,000 km of underground and overhead cables.

The NSW government will invest the proceeds in greenfield infrastructure across the state. “We now have A$20 billion secured to go towards the new schools, hospitals, roads, rail and cultural institutions across NSW – forever changing the face of the state,” Gladys Berejiklian, NSW premier, said in a statement.

A string of other privatizations of brownfield infrastructure assets have contributed to that A$20 billion pool. Since 2013, the state has sold long-term leases on the TransGrid and Ausgrid electricity networks and ports of Newcastle, Botany and Kembla. It also extended the lease on Sydney's Westlink M7 toll road in return for the investors committing to the NorthConnex tunnel project.

Foreign participation in certain deals has prompted controversy. The A$10.26 billion TransGrid deal, which closed in late 2015, featured a combination of foreign and domestic investors, but bids for Ausgrid from Cheung Kong Infrastructure and State Grid Corp. of China were blocked on national security grounds. The asset was sold last year for A$16.2 billion to IFM Investors and AustralianSuper.

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• Topics
• Australasia
• Infrastructure
• Infrastructure
• Buyouts
• Australia
• Macquarie Group
• AMP Capital Investors
• Qatar Holdings