Alinta seeks to block investor's votes

The high stakes battle over the future of Alinta Energy has become heated after the company took action against security holder Coastal Capital International, which is believed to be opposed to a planned scheme of arrangement.

Alinta Energy has applied to the Takeover Panel to limit Coastal Capital's voting rights at an extraordinary general meeting, which is being held next week to seek approval for a complex debt-for-equity swap.

If the deal is approved, ownership of most of Alinta's assets will pass to its finance syndicate, which includes private equity funds TPG Capital, Oaktree Capital and Anchorage Capital.

The number of investors in the finance syndicate is believed to number more than 50, and regularly changes as investors buy and sell Alinta's securities on the secondary market.

One of the major buyers appears to be Coastal, which has acquired 16.53 per cent of Alinta Energy's securities.

Alinta has submitted to the Takeovers Panel that Coastal acquired these securities without obtaining prior approval under the Foreign Acquisitions and Takeovers Act to acquire more than 15 per cent.

Alinta submits that the acquisition constitutes "unacceptable circumstances" having regard to the effect it "is having and is likely to have on the control of .... Alinta Energy Trust".

It is seeking orders from the Takeovers Panel that Coastal be prohibited from acquiring any further Alinta Energy securities, unless it gets regulatory approval, and is seeking to place limits on Coastal's voting rights.

Specifically, it is seeking orders that Coastal "be prohibited from exercising, or alowing the exercise of, any voting rights at the EGM attaching to Alinta Energy securities in excess of the number which gives Coastal Capital control over 15% of the total votes to be cast at the meeting".

Coastal and a second investor, Sydney-based Bronte Capital, are believed to have been pushing for the finance syndicate to get more than the proposed 10 cents in the dollar.