Australian Pipeline Trust (APA) has completed the purchase of the 45% interest in SCP Investments (No. 1) Pty Limited, which owns 88.2% of the Goldfields Gas Transmission Pipeline, and the Parmelia gas business comprising pipeline, processing, storage facilities and a small gas retail business for A$206 million, including transaction costs, together with working capital adjustments. (US$1=A$1.4).
APA said the purchase of these assets underpins its strategy of asset diversification and growth. ABN AMRO was APA’s financial adviser for the acquisition.
APA said it partly funded the purchase through an institutional placement, which raised A$61.19 million, net of costs. ABN AMRO Rothschild was lead manager and CommSec was co-manager.
APA said: “This completes a successful relationship between APA and CMS Energy in joint ownership of SCP.”
APA is an ASX-listed natural gas pipeline company in Australia with interests in over 7,500km of pipeline infrastructure. The trust has a varied and quality customer base including AGL, Cooper Eromanga Basin Producers, Xstrata, Newmont, CS Energy, BHP Billiton, Zinifex, Incitec Pivot, Origin, Energex and WMC.
APA managing director Jim McDonald said the acquisition is expected to be earnings and cash flow per unit accretive from year one.
“The consensus earnings estimates for APA for FY04 are in the range of A$41 million to A$43 million net profit after tax and pro forma, the acquisition would have added around A$8 million to that number.
“Before the acquisition we accounted for Southern Cross Pipelines (SCP) on an equity accounted basis because we previously owned 45% of SCP No1 Pty Ltd, which owns 88.2% of the GGT. However, we will now consolidate it and revenue will increase substantially by some 25%.
For the year ended 30 June 2004, the revenue generated from the assets acquired was A$103.1 million and EBITDA was A$72.2 million.