From: http://www.theaustralian.com.au/index.asp?URL=/finance/4214456.htm Gas sale expected to reap $4bn By LOU CARUANA 10mar99 THE Victorian Government expects to receive offers totalling $4 billion for its two remaining gas retail and distribution businesses when tenders close tomorrow. The asset sales will make way for Victoria's 1.4 million gas customers to choose their supplier on a staged basis by September 2001 and will effectively complete the privatisation of the State's energy assets. Victoria's customers using more than 500,000 gigajoules � effectively 35 firms that collectively use 24 per cent of the State load � will choose their supplier from October 1. The two businesses for sale, Ikon-Multinet and Energy 21-Stratus Networks, are expected to follow the lead of Westar-Kinetik and sources close to the sale process expect the operations to be sold at about 16 times earnings multiples. The cashed-up US energy giant Texas Utilities, which already owns the Eastern Energy electricity distribution business in Victoria, surprised the market last year when it paid $1.6 billion for Westar-Kinetik because of the strategic value of the businesses. AGL and Utilicorp-AMP are believed to want the remaining gas assets to complement their existing electricity distribution businesses. Boral-Envestra is also keen to expand into the Victorian market. Ikon-Multinet � which has earnings before interest, tax, depreciation and amortisation of $135 million � is expected to fetch $2.16 billion, and Energy 21-Stratus, with earnings of $120 million, should go for $1.9 billion. Ikon-Multinet serves about 500,000 Melbourne customers and Energy 21-Stratus serves the same number in the city's eastern suburbs and eastern Victoria. After the sale of Ikon-Multinet and Energy 21-Stratus, the only remaining assets to be sold will be the gas-fired electricity assets of Ecogen Energy and the gas transmission pipeline company. Ecogen is expected to fetch about $400 million. Transmission Pipelines Australia, formerly the Gas Transmission Company, will continue to own and maintain Victoria's existing transmission pipeline infrastructure, as well as seeking to undertake new investments. Under the privatised system developed by the Victorian Government, the gas transmission system and the wholesale gas spot market will be operated by a new statutory corporation, Victorian Energy Networks Operation (VENcorp), which will begin on Monday. VENcorp will be able to signal to suppliers an indicative price for gas in much the same way the National Electricity Marketing Management Company does for electricity. VENcorp is not expected to have an impact on the price of the gas assets because most gas supply is already tied up in contracts. -- Leftlink - Australia's Broad Left Mailing List mailto:[EMAIL PROTECTED] http://www.alexia.net.au/~www/mhutton/index.html Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
