Singapore power in Aust listing plan

Singapore Power is to list its Australian power assets by selling a 49 per cent stake in SP AusNet via an IPO.

Investors will be offered a stapled security which has one share each in the transmission, distribution and finance parts of the business.

SP AusNet does not hold any assets in Western Australia, but it has signalled it is looking to widen its portfolio in Australia and New Zealand.

the full announcement is:

Singapore Power Limited ("Singapore Power"), the owner of SP AusNet, today announced its intention to sell 49 per cent of SP AusNet's transmission and distribution businesses via an Initial Public Offer ("IPO") in Australia and Singapore1. Investors in SP AusNet will be offered a stapled security ("Security"), each of which comprises: - One share in SP Australia Networks (Transmission) Ltd; - One share in SP Australia Networks (Distribution) Ltd; and - One unit in SP Australia Networks (Finance) Trust. SP AusNet aims to deliver sustainable, stable and predictable distributions to Security holders. The investment is forecast to pay an annualised distribution yield of between 7.0% and 8.5% in financial year 2006, increasing to a yield of between 7.2% and 8.7% in financial year 2007. Distributions to investors are expected to comprise 68% tax-deferred capital distributions in financial year 2006 and approximately 65% in financial year 20072. SP AusNet has lodged a combined Prospectus and Product Disclosure Statement ("Australian Prospectus") with the Australian Securities and Investments Commission ("ASIC") and a preliminary prospectus ("Singaporean Prospectus") with the Monetary Authority of Singapore ("MAS"). SP AusNet will have a primary listing on the Australian Stock Exchange Limited ("ASX") with a concurrent secondary listing on the Singapore Exchange Securities Trading Limited ("SGX-ST"). 1 Currently, SP AusNet is indirectly wholly owned by Singapore Power Limited through its subsidiaries Singapore Power International Pte Ltd, which owns 51% of the Securities and SP (Belgium) Holdings SA (formerly known as SP (Belgium) Holdings SPRL), which owns 49% of the Securities.
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2 Reference to tax deferred capital distributions is only applicable to Australian tax residents who are investors in the Australian Offer
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Australian and Singaporean investors are being offered a unique opportunity to invest alongside Singapore Power in SP AusNet. Key investment highlights include: - Tax deferred capital distributions: SP AusNet has an annualised forecast distribution yield range of 7.0% to 8.5% for financial year 2006, which increases to 7.2 to 8.7% in financial year 2007. Distributions are structured to be tax-efficient for Australian tax resident investors, and are forecast to consist of approximately 68% tax deferred capital distributions, 27% interest distributions and 5% fully franked dividends in the year ending 31 March 2006. - Regulated assets, diversified by energy source: Almost 90% of SP AusNet's revenues are regulated, providing SP AusNet with predictable cashflows. SP AusNet's assets are also diversified by energy source and include electricity transmission, electricity distribution and gas distribution businesses. - Well-positioned for growth: SP AusNet is currently Singapore Power's electricity and gas transmission and distribution vehicle in Australia. SP AusNet's organic growth opportunities will come from its electricity and gas businesses, which operate as regulated natural monopolies. The strategic location of SP AusNet's distribution assets in the major Victorian population growth corridors, which have seen rising electricity and gas consumption, is expected to enhance growth opportunities. - "A" range credit rating: SP AusNet's credit rating will be "A" by Standard and Poor's. SP AusNet currently intends to maintain an "A" range credit rating to achieve a competitive cost of capital for its future growth strategy. - Strong Board and management team: SP AusNet's Board comprises independent directors and Singapore Power representatives. SP AusNet's executive management team3 has a depth of knowledge and experience with each member of the team having, on average, more than 20 years of experience in the energy industry. - Alignment with Singapore Power: SP AusNet aims to continue its strong relationship with its key stakeholder, Singapore Power, and leverage the operational and management expertise of its majority security holder and manager via a Management Services Agreement with SP Australia Networks (Management Services) Pty Ltd ("SP AusNet Management"), a wholly owned subsidiary of Singapore Power. Singapore Power currently intends to invest through SP AusNet in electricity and gas transmission and distribution growth opportunities in both Australia and New Zealand. At the completion of the IPO, Singapore Power will indirectly own 51% of SP AusNet. The transmission and distribution networks, businesses and finances of SP AusNet will be managed by SP AusNet Management. SP AusNet Management has an experienced management team with expertise in managing regulated businesses. SP AusNet Chairman, Mr Ng Kee Choe, said this IPO represents an opportunity for investors in Australia and Singapore to invest alongside Singapore Power in a high-quality Australian energy and utility business. "SP AusNet aims to deliver sustainable, stable and predictable distributions to Security holders," said Mr Ng. "The strong relationship between Singapore Power and SP AusNet is a benefit to investors.
3 SP AusNet's executive management team is provided by a wholly owned subsidiary of Singapore Power Limited
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"Singapore Power is a key stakeholder in SP AusNet through both majority ownership and its management of SP AusNet. "The Management Services Agreement with SP AusNet Management contains operational, financial and market-based key performance benchmarks in order to align the interests of SP AusNet Management with the interests of investors." Mr Ng said that, in addition to seeking organic growth, SP AusNet would continue to identify investment opportunities that are consistent with its core business in Australia and New Zealand. The Managing Director of SP AusNet, Mr Nino Ficca, said: "With more than two years until the next regulatory reset, and almost 90% of our revenues coming from regulated sources, SP AusNet benefits from predictable cashflows. "Our assets are diversified across electricity and gas transmission and distribution. We are currently accountable to two regulators and our regulatory resets are spaced over a number of years. The business has already dealt successfully with four regulatory resets, the most recent being the Electricity Distribution Price Review (EDPR) determination released by the Victorian Essential Services Commission on October 19, 2005." SP AusNet's Assets SP AusNet's electricity transmission and electricity and gas distribution assets comprise the following regulated assets: - A 6,574 kilometre electricity transmission network indirectly servicing over 2.2 million electricity consumers across Victoria; - An electricity distribution network delivering electricity to approximately 575,000 customer supply points in an area of more than 80,000 square kilometres in eastern Victoria; and - A gas distribution network delivering gas to approximately 504,000 customer supply points in an area of more than 60,000 square kilometres in central and western Victoria.