State Grid Corp of China in talks to purchase another 25% stake in ElectraNet
State Grid Corp. of China, the world’s largest utility by revenue, is in talks to buy Hastings Funds Management’s 25% stake in South Australia state power transmission grid operator ElectraNet for up to 400 million Australian dollars (US$415 million).
In November, State Grid bought Powerlink Queensland’s 41.1% stake in ElectraNet for around A$500 million and at a similar valuation, a deal with Hastings could be worth between A$370 million and A$400 million. But an indicative, non-binding offer, has so far not been tabled, said the people.
A Hastings spokesman said the company does not comment on asset acquisitions or divestments, an ElectraNet spokeswoman was not immediately available to comment and a State Grid spokesperson did not respond to requests for comment. Westpac Banking Corp. Australia’s second-largest bank by size, owns Hastings Funds Management.
The power grid in South Australia covers a service area of around 200,000 square kilometers, comprising transmission lines spanning 5,600 kilometers. That’s set to grow in the future as mining investments create demand for power in remote parts of the state lacking a grid connection.
Earlier in November, State Grid Corp.’s general manager Liu Zhenya told reporters attending the Communist Party Congress in Beijing that State Grid’s ambition is to nearly quadruple its overseas assets by 2020 to as much as US$50 billion. State Grid’s assets were valued at US$370 billion as at November 30, 2012.
ElectraNet’s other shareholders are Malaysia’s YTL Power Investments and UniSuper.