2nd UPDATE: Alinta Has Received Indicative Takeover Bids

Debt laden Australian power generator Alinta Energy Group (AEJ.AU) said Wednesday that it has received indicative takeover bids from a number of sources and dismissed speculation that it has considered appointing a voluntary administrator.

The owner of 12 operational power stations, however, said that its loan covenants could come under pressure and that it has asked its lenders to vary them.

Any buyer of Alinta would have to take on about A$3 billion in debt, with the company currently trading at a market value of around A$50 million after its securities were hammered in the wake of the global financial crisis.

A number of indicative, non-binding bids have been received for both the whole company and individual assets, Alinta said, confirming various media reports.

The former satellite fund of failed investment house Babcock & Brown Ltd. said in April it had hired Lazard to examine ways to reduce its heavy debt load, including potential asset sales and capital management opportunities.

An unsourced report on The Australian newspaper's website said Wednesday that a consortium comprising Origin Energy Ltd. (ORG.AU), APA Group (APA.AU) and Japan's Marubeni Corp. (MARUY) has emerged as a key bidder for Alinta.

Other media reports have cited French energy giant GDF Suez (GSZ.FR) and diversified miner BHP Billiton Ltd. (BHP.AU) as possible rival bidders.

Spokespeople for Origin, APA and BHP all declined to comment on the reports. BHP sold two Western Australian power stations to Alinta about 12 year ago and may be interested in repurchasing those individual assets.

Credit Suisse Analyst Sandra McCullagh said Tuesday that while Origin, with a healthy balance sheet, is well placed to buy power stations from Alinta, it may overlook them for more accretive opportunities, including the looming privatization of energy retailers in New South Wales state.

Origin already has an offtake agreement for Alinta's Braemer power station in Queensland state, so owning the asset may not be a priority, McCullagh said.

She added that the natural owner of Alinta's Western Australia state generators would probably want to have its own gas supply to hedge against gas price risk and Origin's Perth Basin gas production is insufficient to cover the Alinta load.

According to Alinta's interim accounts lodged February, the company at Dec. 31 had total current and non-current assets, including intangibles, of A$5.15 billion and total liabilities of A$4.43 billion, including A$3.26 billion of current and non-current borrowings.

The company said a report on subscription service debtwire.com indicated it had threatened its lenders with voluntary administration if they didn't amend its covenants.

"Alinta Energy has made a request to its banking syndicate for the variation of covenants for the period to 31 March 2011, as under some trading scenarios, these covenants could come under pressure and frustrate the deleveraging activities," the company said.

It added that it "has been working closely and co-operatively with its banking syndicate and is not considering the appointment of a voluntary administrator".

Alinta reiterated its guidance for the year to June 30 for normalized earnings before interest, tax, depreciation and amortization of A$288 million.

Alinta Energy securities have risen sharply in Wednesday's trading and at 0418 GMT were up 1.6 cents or 35% at 6.1 cents.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com

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