Aquila looks to offload Aust, NZ assets

Under pressure from international rating agencies, US giant Aquila Inc is considering to sell its entire Australasian portfolio to reduce debt.

New Zealand energy and technology player UnitedNetworks has been approached by its holding company UtiliCorp NZ (whose ultimate parent is Aquila) to consider selling its entire operation. UtiliCorp NZ has a 70.2% stake in UnitedNetworks.

With assets of $2.3 billion, UnitedNetworks is New Zealand's eleventh largest company by market capitalisation and distributes gas and electricity as well as owning broadband communication networks in the country.

UnitedNetworks has appointed Deutsche Bank as its adviser to seek expressions of interest from potential buyers, which could include Auckland electricity company Vector, network company Powerco as well as Natural Gas Corporation.

Analysts also said infrastructure trusts in Australia and Asian companies could also be interested in UnitedNetworks.

The news sparked a 12 cent rise in UnitedNetworks' share price to $NZ7.78.

On the other side of the Tasman, Perth-based gas utility AlintaGas has told the market it has received no notice from its 45% cornerstone shareholder, WA Gas Holdings, which is owned by United Energy (50%) and Aquila (50%).

However, given that Aquila has publicly stated its intention to improve its credit rating via an asset sale, AlintaGas said it has appointed Caliburn Partnerships as independent advisers as a precaution.

If Aquila does decide to sell its AlintaGas stake, it cannot do so until after October 17, which was part of the cornerstone investor conditions set during the privatisation of AlintaGas in 2000.

AlintaGas shares are currently trading at $4.27, 2c higher than yesterday and about 11c short of what Aquila and United paid for the cornerstone stake.

As well as its stake in UnitedNetworks and United Energy, Aquila's other regional interest is the Multinet gas business in Victoria.