Alinta sale ends IPO plans
Western Australia's largest gas retailer Alinta Energy has been sold to a Hong Kong-based company.
Chow Tai Fook Enterprises Limited (CTFE) — owned by the Cheng family — has reportedly paid an undisclosed sum for the utility.
It puts an end to plans that would have seen Alinta list on the Australian Securities Exchange (ASX) for an estimated $4 billion.
Alinta currently belongs to a group of hedge funds and private equity firms.
The company says its sale marks CTFE's first significant investment in Australia's energy market.
“[CTFE] are committed to ensuring the energy needs of Alinta's customers continue to be met, and intend to grow the business by pursuing value-accretive investment opportunities in the Australian energy markets as they arise,” Alinta said in a statement.
Alinta chief executive Jeff Dimery and the senior management team will keep their roles.
The deal will now go before the Foreign Investment Review Board (FIRB).
WA's Premier-elect Mark McGowan said the FIRB will determine whether Alinta can be sold, but he does not seem particularly excited about the deal.
“That was one of the reasons I didn't support the sale of Western Power, because inevitably they end up in foreign ownership,” he said.
Business commentator Tim Treadgold says the $4 billion deal could have an effect on the national energy sector.
“Perhaps you could read into it that the Cheng family in Hong Kong has decided that Australia might be about to undergo a bit of re-regulation of the energy market and that means more control, or government control over prices,” Mr Treadgold told reporters.
He said CTFE already has a range of investments in Australia.
“The founding father of the firm was at one stage the world's 58th richest man and he was the third richest man in Hong Kong, so the family's extremely wealthy,” Mr Treadgold said.
“They're the biggest jewellery dealer in Hong Kong and they're making a very interesting diversionary investment into Australian energy.
“They're seeing something that other people couldn't see.”