Origin Energy taps shareholders for A$2.3B

Origin taps shareholders for A$2.3B to refinance acquisition debt

by Jonathan Underhill

March 15 (BusinessDesk) - Origin Energy Ltd., which acquired energy assets from the New South Wales state government to become Australia’s biggest electricity retailer, has tapped shareholders for A$2.3 billion to help refinance debt from the transaction.

The Sydney-based company, which owns a controlling stake in New Zealand’s Contact Energy Ltd., is offering shares at A$13 apiece in a one-for-five pro rata renounceable entitlement offer.

The issue price amounts to a discount of about 17% from Origin’s most recent trading price on the ASX.

The funds raised will refinance part of the debt Origin took on for its A$3.26 billion acquisition of Integral Energy, Country Energy and the rights to sell the output of the state-owned Eraring power station, which were completed at the start of this month.

Some of the funds will also be used to strengthen the firm’s balance sheet, it said.Origin teamed with Hong Kong utility CLP Holdings Ltd. to buy electricity assets from the state government for a combined A$5.3 billion, outbidding AGL Energy Ltd.

CLP’s TRUenergy acquired assets including retailer EnergyAustralia. The sale of the state’s power assets was a 12-year saga that ended amid claims they were sold too cheaply and saw directors resign en masse from some of the businesses.

“The acquisition of the NSW energy assets is a milestone for Origin and is expected to be materially accretive to underlying earnings per share,” chairman Kevin McCann said in a statement today.

The acquisitions lifted Origin’s customer numbers to 4.6 million. The offer of new shares is in two stages, an institutional offer and an offer to retail investors, who can trade their entitlements on the ASX.

JP Morgan Australia, Macquarie Capital Advisers and Merrill Lynch International (Australia) are fully underwriting the offer.

Shares of Origin were last at A$15.66 before being halted for the capital raising. The stock is rated ‘outperform’ based on the consensus of 13 analyst recommendations compiled by Reuters.

Origin affirmed its forecast, given with the first-half results on Feb. 24, for full-year earnings before interest, tax, depreciation and amortisation to rise about 35%, for an underlying profit gain of about 15%.The company said it is considering separate funding options for Australia Pacific LNG, its A$35 billion coal-seam gas venture with ConocoPhillips.

(BusinessDesk) 14:03:58

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