SYDNEY - Australian infrastructure firm SP Ausnet is close to a deal with Singapore Power to buy some assets of energy firm Alinta for A$4 billion (S$5 billion), the Australian Financial Review said on Wednesday.
SP Ausnet, which owns and operates electricity and gas transmission networks in Victoria state, will conduct a A$3 billion rights issue to fund the purchase, the business daily said.
Investment banks UBS AG and Morgan Stanley, which will be managing the rights issue, will underwrite the balance of A$1 billion to fund the transaction, the paper said.
A spokesman from SP Ausnet said the company has not received a formal proposal from Singapore Power.
'Discussions are underway. We are anticipating that they will make an offer soon,' said SP Ausnet spokesman Louisa Graham. She declined to comment on any rights issue.
Alinta was acquired and subsequently carved up by a consortium of investment firm Babcock & Brown and state-owned utility Singapore Power.
The acquisition of the assets will double SP Ausnet's portfolio of gas and electricity networks.
Singapore Power owns 51 per cent of SP Ausnet, which was listed in Australia and Singapore in December 2005.
Analysts have raised concerns about SP Ausnet buying Alinta assets, given the high price Babcock and Singapore Power paid in their A$8 billion takeover.
Australian-listed shares in SP Ausnet rose 1.8 per cent to A$1.405 on Wednesday, underperforming a 2.3 per cent gain in the broader market. -- REUTERS