ERM Power may bid for Mac Gen

Companies from China, Thailand and Australia may put forward bids for two coal-fired power stations in the Hunter Valley.

Indicative bids for Macquarie Generation are due later this month after which a final sale of the two coal-fired power stations with a book value of $2 billion may be completed by the end of March next year.

Brisbane-based ERM Power (EPW), China’s Shenhua Group Corp (which owns coal mines, ports, railways and power stations), and Thailand’s Ratchaburi Electricity Generating Holding Pcl may put forward indicative bids for Liddell and Bayswater power stations in New South Wales’ Hunter Valley.

ERM, Shenhua and Ratchaburi declined comment or did not return calls seeking comment.

An assessment of the indicative bids will be made at the end of October, after which a final list of bidders will be decided. These final bidders will get detailed financial and operational information, including a data room and visits to the sites offered for sale. This includes a vacant site that could be used to house a coal or gas-fired plant.  

The NSW Government is hopeful that it can get more than the book value for the two assets in its auction. The Federal Government has promised to repeal the carbon tax, potentially boosting the value of the two black coal-fired power stations.

Further helping the price of Liddell and Bayswater may be the ending of subsidies for brown coal–fired power stations in Victoria, as well as an expected increase in Australian gas prices, which are currently below global rates.

Goldman Sachs Group Inc. is managing the sale on behalf of the NSW Government.