Canadian giant Brookfield Infrastructure Partners’ global capital recycling program has found its way down to Australia.
Street Talk can reveal Brookfield is seeking a buyer for Tas Gas, which includes both natural gas distribution and retailing in Tasmania, and utilities provider Enwave Australia.
It is understood Brookfield has hired investment bank Citi help sell the businesses together, and wants to see a two-part auction up and running in the June quarter.
The assets are expected to be worth up to $500 million and are likely to draw interest from Australian and offshore utilities investors, infrastructure funds and energy retailers.
Brookfield is seeking to have a deal signed by the end of the year.
Tas Gas is expected to be pitched as a monopoly gas provider – and the chance for a cashed up infrastructure investor to get its hands on an up and running network. Tas Gas supplies gas to about 60,000 customers in Tasmania, predominantly in Hobart, Launceston, Burnie and Devonport, and has an associated retail business called Tas Gas Retail.
Enwave designs, builds and operates water, gas and energy networks for communities. It is similar to OC Energy, which was acquired by ASX-listed Origin Energy in February.
CK Group, which owns gas networks in South Australia and Queensland, and Jemena are among offshore-owned trade players expected to at least take a look, while analysts reckon Australia’s APA Group may also be interested. Infrastructure fund managers including IFM Investors, QIC Ltd, AMP Capital and Macquarie’s MIRA are also likely to be targeted.
It is understood Brookfield interviewed a handful of investment banking teams in Australia to run the auction, before hiring Citi. The bank’s last major public assignment with Brookfield in Australia was when it advised the Canadian investor on its bid for Asciano, alongside Macquarie Capital, in 2015 and 2016.
The sale is part of Brookfield’s capital recycling plan, which sees it recycle proceeds from mature assets into new acquisitions. Brookfield prides itself on acquiring infrastructure assets, improving them and later finding a new owner willing to pay more for a mature and well-run business.
Brookfield told investors last year it had more than $US5 billion of assets to “recycle” in the coming three to five years.
The Tas Gas assets are a small part of Brookfield’s Australian portfolio. The firm also owns the Dalrymple Bay Coal Terminal in Queensland, a stake in what was Asciano’s ports business and operates 5000 kilometres of railroad tracks in Western Australia, among other infrastructure assets.