Australia’s Loy Yang Power considers float option

3 October 2002 – The three owners of Australia’s Loy Yang power station are considering a flotation worth more than $1bn among a range of options for the asset.
CMS Energy, Xcel Energy subsidiary NRG Energy and Horizon Energy Investment Group teamed up several months ago to sell the 500 MW facilty in Victoria state.
“A float is one of many options being considered,” a source close to the process told the Reuters news agency.
The three shareholders, who bought Loy Yang for A$4.7bn ($2.55) in 1997, need to raise enough money to make a A$500m debt repayment in March 2003.
CMS Energy has been trying to sell its 50 per cent stake in Loy Yang for more than a year and NRG Energy was originally rumoured to be a potential buyer.
However, NRG announced earlier this year it would attempt to improve liquidity and reduce debt through the sale of some of its assets, including its Australia power generation portfolio.
The three shareholders agreed to sell Loy Yang as a whole and expressions of interest were intitially received from Belgian company Tractebel, a unit of French utility Suez , and U.S. energy company Duke Energy.
However, sources have said that Duke Energy has backed right away from the sale and that Tractebel is beginning to waiver.
NRG ENERGY ASSETS
Meanwhile, the sale of NRG’s stake in Queensland state’s Gladstone power station and wholly-owned Flinders power station in South Australia is currently dragging – final bids were submitted early last month – due to the company’s uncertain future.
“The NRG sale process will just have to continue until a resolution is reached. It won’t be abandoned,” a source close to the sale told Reuters.
Bids were submitted for Flinders by Belgian company Tractebel, a unit of French utility Suez , Malaysian company Genting Bhd , Hong Kong’s CLP Holdings Ltd and New Zealand’s Contact Energy.
While bids were submitted for Gladstone by Contact Energy, power generator International Power and Japan’s Electric Power Development Company.

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