(EnergyAsia, January 4 2012, Wednesday) — As part of a capital reduction proposal by Australia’s Oakey Power Holdings Pty Ltd (OPH), Contact Energy will sell off its 25% stake in the company for A$31 million to the other two shareholders. (US$1=A$0.96).

The proposal, linked to the refinance of Oakey Power Station’s project debt, has been approved by owner OPH and its senior lender, the Commonwealth Bank of Australia.

About A$20 million will be raised from refinancing while the remaining A$11 million will come from a subscription for new shares in OPH by its 50%-shareholder, ERM Oakey Power Holdings Pty Ltd, and 25% shareholder ERM Oakey Power Pty Ltd.

ERM Power fully owns ERM Oakey Power Holdings Pty Ltd, and half of ERM Power.

If the proposal is implemented, ERM Power said its effective interest in Oakey Power Station will increase from 62.5% to 83.33%.

The refinance and capital reduction is subject to approval by OPH shareholders in sometime this month and other customary conditions.

Founded in 1980, ERM Power is an Australian Securities Exchange-listed integrated energy company which operates electricity sales, generation and gas procurement businesses.