Australia’s Victoria State said February 13 it will sell its 29 percent stake in the country’s leading renewable electricity generator, Snowy Hydro Ltd., clearing the way for a A$1.7 billion (US$1 billion) initial public offering (IPO) of the entire company by June.
The move followed an announcement by New South Wales in December that it would sell its 58 percent stake in Snowy Hydro, and the February 7 decision by the Australian federal government to include its 13 percent stake in the proposed IPO.
Victoria’s decision comes after it won assurances on environmental concerns, including irrigation for farmers bordering the project and protecting flows on the Snowy River.
Sale likely to be via initial public offering
On February 8, New South Wales appointed Credit Suisse its financial adviser for the sale, which is likely to be through a stock market listing. Analysts said Victoria’s decision makes 100 percent of the shares available and could revive the prospect of a trade sale. However, Australia Finance Minister Nick Minchin said February 15 an IPO was the most likely selling method.
“The New South Wales government has made it clear it wants an IPO and given they own 58 percent and we own 13 percent, we’re relaxed about participating on that basis,” Minchin said. “I expect it to be an IPO.”
Snowy Hydro is owner of the 3,756-MW Snowy Mountains Hydroelectric Scheme, Australia’s greatest engineering project. It consists of seven power stations and 16 dams, connected by 145 kilometers of tunnels and 80 kilometers of aqueducts. Snowy Hydro also owns the 300-MW Valley gas-fired power plant in Victoria, and is currently building another 320-MW gas-fired plant in Victoria.