UPDATE: Infigen Says May Revisit U.S. Wind Farm Sale
May 12 2010 - 1:36AM
Dow Jones News
Infigen Energy Ltd. (IFN.AU) Chief Executive Miles George said
Wednesday that the company will consider making a second attempt to
sell its U.S. wind power assets after its most recent effort was
hampered by a sharp fall in energy prices and wind speeds.
"We certainly wouldn't rule it out," George told Dow Jones
Newswires in an interview. "We have a working assumption at the
moment that we're going to be holding those assets for a minimum of
two years but we wouldn't rule out a sale in the future."
His comments helped add momentum to a rally in Infigen's
securities on Wednesday, initially triggered by it confirming it
has made an Australian government shortlist to potentially receive
assistance under the A$1.5 billion Solar Flagships subsidy.
Sydney-based Infigen's securities took a hammering last month
when it said it will hold onto the U.S. assets, representing a big
strategy backflip for the company, which wanted to use the sale
proceeds to invest in its Australian wind farm development
pipeline.
George said the U.S. portfolio, which analysts said could have
attracted bids near A$2 billion, contains quality assets that
Infigen is currently focusing on operating efficiently. "We're
happy to hold those assets until market conditions are such that (a
sale) is a possibility again," he said.
He said Infigen could sell the assets before two years time if
it gets an attractive offer.
The company said last month that a range of bidders that had
expressed an interest in the U.S. assets in November had since
changed their position due to the sharp drop in U.S. energy prices,
slow wind speeds and more regulatory uncertainty sparked by the
outcome of climate change talks in Copenhagen.
While wind speeds are already improving as an El Nino weather
pattern subsides, George said U.S. energy price are yet to
increase.
"The long term prospects of the U.S. economy do seem to be
improving," he added. "To the extent that that improves at a
general level there should be a flow through into energy and
electricity prices."
For the first round of the solar flagship program, Australian
lawmakers announced late Tuesday that four projects have been
shortlisted to build a large-scale solar photovoltaic power plant,
while another four have been shortlisted to build a large solar
thermal plant.
Another two projects will be selected at a later date in round
two.
Infigen's joint venture with Suntech Power Holdings Co. Ltd.
(STP) is on the solar PV shortlist along with AGL Energy Ltd.
(AGK.AU), Hong Kong-listed CLP Holdings Ltd. (CLPHY) subsidiary
TRUenergy and BP Plc (BG.LN).
The winner will be announced in the first half of 2011.
In the meantime, George said Infigen and Suntech will develop a
proposal over the next nine-to-12 months to show the
government.
George declined to put a cost estimate on the project, other
than saying that about a third of the funding would come from the
government, with the rest to likely to come from state governments
and some project financing, and perhaps equity from an extra joint
venture partner.
New South Wales and Victoria states have committed to provide
funding of up to A$120 million and A$100 million respectively to
the selected project, he said.
The Infigen and Suntech JV is proposing to build 195 megawatts
of generating capacity, spread over three sites in NSW and
Victoria, that probably won't be operational until 2015.
"Solar power is certainly a medium-to-longer term aspiration,
George said. "We would see wind energy as continuing to have by far
the largest proportion of our total generating capacity in
Australia."
The four shortlisted bidders for solar thermal are Spain's
Acciona SA (ANA.MC), Parsons Brinckerhoff Inc. (PBH.XX), Wind
Prospect Group Ltd. and Transfield Services Ltd. (TSE.AU).
At 0502 GMT, Infigen stapled securities are up four cents, or
5.1%, at 82.5 cents.
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692;
Ross.Kelly@dowjones.com
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