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APA takes stake in resource sector with Alinta buy

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Photo by Reuters

23rd August 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Energy infrastructure group APA Group has struck a A$1.72-billion acquisition agreement with energy provider Alinta Energy over its Pilbara assets, saying the resources sector had been identified as a key customer group.

Alinta’s Pilbara assets include 200 km of high voltage powerlines, the 210 MW Port Hedland power station, the 238 MW Newman power station, the 35 MW Newman battery, the 60 MW Chichester solar farm, an 11.8% stake in 203 TJ/d Goldfields gas transmission pipeline, and 80 MW of further capacity under construction.

APA this week said that the acquisition provided APA with a significant growth platform to develop and operate remote grid energy solutions for Australia’s resources industry, complementing APA’s already strong development and operational capability in key resources areas such as Mount Isa and Gruyere.

Alinta Energy Pilbara has existing long-term power purchase agreements (PPAs) with a number of Australia’s most significant resources companies and an attractive pipeline of projects to bring new renewable energy solutions to market, aligned to APA’s Climate Transition Plan, APA said in a statement. This includes near-term actionable projects with strong wind and solar resources in highly sought-after strategic locations with strong interconnectivity to existing assets.

“The acquisition of Alinta Energy Pilbara delivers APA a significant new growth platform in the attractive remote grid energy sector. It’s consistent with our strategy to be the partner of choice in delivering infrastructure solutions for the energy transition and links directly with our focus on customers in the resources sector,” APA CEO and MD Adam Watson said.

“The business is underpinned by high-quality assets and a stable base of blue-chip customers operating in one of the world’s leading mining geographies.

“The acquisition is expected to deliver positive immediate and long-term benefits to security holders, and complements our existing assets in Western Australia. It allows us to leverage our existing skills in operating large-scale gas, renewables and storage infrastructure, and provides the opportunity to capitalise on the increasing need for reliable, affordable and lower emissions energy as the resources sector continues to decarbonise.”

APA intends to raise A$675-million through a fully underwritten pro-rata institutional placement and will undertake a non-underwritten security purchase plan (SPP) for eligible security holders to raise A$75-million. The proceeds will be used to partly fund the acquisition.

The balance of the purchase price will be funded by new debt facilities established in connection with the acquisition of A$993-million.

The placement will consist of 79-million shares, to be issued at a price of A$8.50 each, representing an 8.2% discount to APA’s closing price on August 22 and an 8.7% discount to the company’s five-day volume weighted average share price.

The SPP will be priced at the lower of the placement price or a 2% discount to the five-day volume weighted average share price up to, and including, the closing date of the SPP.

The SPP will open on August 31 and close on September 15.

Edited by Creamer Media Reporter

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