Mitsui broadens local power exposure with Hazelwood owner play
The two companies are already closely affiliated, since Mitsui is a 30 per cent shareholder in Victoria's Loy Yang B power station along with holding a 21 per cent stake in the Kwinana power station in Western Australia, along with GDF Suez.
In the latest deal, Mitsui has taken a 28 per cent stake in GDF Suez's local arm, International Power (Australia) Holdings, which operates a portfolio of 2604 megawatts. The price has not been disclosed, but it is expected to have been several hundred million.
International Power owns Canunda, a 46-MW wind farm in South Australia, Hazelwood, a 1675-MW coal-fired power station in Victoria, Pelican Point, a 487-MW gas-fired power station in South Australia, Synergen which has a 396-MW gas-fired peaking plant in South Australia along with retailer Simply Energy, with some 350,000 electricity and gas accounts.
"This new partnership ... will contribute to the group's 2013-14 portfolio-optimisation program and will lead to a reduction in the group's net debt upon completion of the transaction," GDF Suez said recently.
GDF Suez, 36.7 per cent owned by the French government, completed the purchase of all of the capital of UK-based International Power last year, leaving it with an estimated €34 billion in debt. Since the acquisition, it has been selling selected assets as it seeks to cut borrowings.
The deal between the two came as Mitsui was negotiating to buy a one-fifth stake in the Astoria gas-fired power station in New York, a $US1 billion 575-megawatt asset, which has just been concluded.
The high level of group debt is believed to have forced GDF Suez out of the bidding for power assets being sold in NSW by the state government.
Earlier this year, Commonwealth Bank sold its 8.16 per cent share in Hazelwood. The brown-coal fired station provides about a quarter of Victoria's power.
Frequently Asked Questions about this Article…
Mitsui & Co has taken a strategic 28% stake in International Power (Australia) Holdings, which operates several power stations across Victoria and South Australia.
Mitsui's strategic stake in GDF Suez's power stations across Victoria and South Australia enhances its local power exposure and strengthens its partnership with GDF Suez. This move is part of a broader strategy to optimize their portfolio and reduce net debt.
Mitsui's investment includes power stations such as the Hazelwood coal-fired power station in Victoria, the Pelican Point gas-fired power station, and the Canunda wind farm in South Australia.
The investment by Mitsui is expected to contribute to GDF Suez's portfolio optimization program and help reduce the group's net debt, which is crucial given GDF Suez's high level of debt following its acquisition of International Power.
GDF Suez is selling assets to reduce its high level of debt, which was estimated at €34 billion after acquiring UK-based International Power.
Mitsui's investment includes a 28% stake in International Power (Australia) Holdings, which operates several power stations such as the Hazelwood coal-fired power station, Pelican Point gas-fired power station, and Canunda wind farm, among others.
The investment by Mitsui is expected to contribute to GDF Suez's portfolio optimization program and help reduce the group's net debt.
GDF Suez sold a stake to Mitsui as part of its strategy to reduce its substantial debt, which was accumulated after acquiring International Power. This sale is part of their broader asset optimization and debt reduction efforts.
The Hazelwood power station is a significant asset as it provides about a quarter of Victoria's power, making it a crucial part of the state's energy infrastructure.
The Hazelwood power station is a significant energy provider in Victoria, supplying about a quarter of the state's power. It is a brown-coal-fired station and is part of the assets included in Mitsui's investment.
Mitsui's investment in Australia is part of its broader strategy to expand its power generation portfolio, as seen with its recent acquisition of a stake in the Astoria gas-fired power station in New York.
Mitsui's investment in GDF Suez's power assets aligns with its global strategy to expand its energy portfolio and increase its presence in the power sector, as evidenced by its recent acquisition of a stake in the Astoria gas-fired power station in New York.
GDF Suez is facing challenges due to its high debt levels, which have limited its ability to bid for new power assets, such as those being sold in New South Wales.
By investing in GDF Suez's power assets, Mitsui stands to benefit from increased power generation capacity, enhanced market presence in Australia, and potential financial returns from a diversified energy portfolio.
The French government owns 36.7% of GDF Suez, making it a significant stakeholder in the company's operations and strategic decisions.
The partnership strengthens the operational capabilities and financial stability of the power stations involved, potentially leading to more reliable energy supply and competitive pricing in the Australian energy market.
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