Important Step to Capture Retail Market Share
KANSAS CITY, Mo.--(BUSINESS WIRE)--June 30, 2000--Continuing to
leverage its investments in growing international energy networks,
UtiliCorp United (NYSE:UCU) today said that Melbourne-based United
Energy Limited, managed and 34 percent owned by UtiliCorp, has closed
its transaction with Shell Australia, Woodside Energy and Ikon Energy
to establish Pulse Energy, a joint energy marketing venture in
UtiliCorp holds a 50 percent economic interest in Ikon Energy, a
gas retailer which is managed by United Energy.
"Pulse Energy will retail electricity and gas to more than 1.1
million electricity and gas customers in Victoria, Australia," said
UtiliCorp President and Chief Operating Officer Robert K. Green, "and
it has the potential to access another 9 million energy customers in
the country's eastern states and in South Australia."
The joint venture positions UtiliCorp and its Pulse Energy
partners to capitalize on the ongoing deregulation of the national
Australian electricity and gas market, Green said. United Energy and
Ikon have a combined 50 percent ownership position in the new joint
"With the retail energy markets becoming contestable next year,
Pulse Energy will provide Australia's first large-scale combination of
electricity and gas services," Green said.
Based in Kansas City, UtiliCorp United is an international
electric and gas company with energy customers and operations across
the U.S. and in Canada, the United Kingdom, Scandinavia, Germany,
Spain, New Zealand and Australia. At March 31, 2000, UtiliCorp had
total assets of $7.5 billion and 12-month sales of $19.6 billion.
Additional information is available on the World Wide Web at
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this press release regarding
UtiliCorp United Inc.'s business which are not historical facts are
"forward-looking statements" that involve risks and uncertainties and
could cause actual results to differ from those contained in the
Note to editors: The following news release was issued in
Melbourne, Australia, Thursday, June 29. All financials below are
expressed in Australian dollars.
UNITED ENERGY CLOSES PULSE ENERGY TRANSACTION
United Energy announced today it had closed the transaction with
Shell Australia, Woodside Energy and Ikon Energy to establish Pulse
Energy -- a joint energy marketing venture.
Pulse Energy will retail electricity and gas to more than 1.1
million electricity and gas customers in Victoria, with the potential
to access a further 9 million energy customers in the eastern states
and South Australia.
United Energy will contribute its electricity retail customers in
return for $A350 million. It will invest $A118 million into Pulse
Energy for a 25% shareholding. Energy Partnership (Ikon Energy), which
is owned by United Energy's cornerstone shareholders (AMP and
UtiliCorp), will contribute its gas retail customers to Pulse Energy
and will also have a 25% shareholding. Shell Australia will have a 40%
shareholding and Woodside Energy a 10% shareholding.
The transaction results in United Energy receiving net proceeds of
approximately $A232 million. Initially this will be used to retire
debt and to position the company to take advantage of future growth
opportunities. United Energy will record a one-time abnormal gain of
approximately $A83 million on the sale of its retail business to Pulse
United Energy will provide Pulse Energy with e-commerce based
customer support services and information technology services, under a
seven-year contract, starting in 2001. The contract is projected,
based on expected customer growth, to generate revenue of $A435
million. Under a separate two-year agreement United Energy will
provide corporate support services such as accounting, treasury,
regulatory and human resources. This contract produces annual revenue
of $A1 million.
EdgeCap, a new electricity and gas merchant business proposed to
be formed by United Energy, Shell Australia and Woodside Energy, will
provide risk management and hedging services to Pulse Energy.
EdgeCap will draw on the substantial trading and risk management
skills of United Energy, and access to significant gas resources held
by Shell and Woodside.
United Energy Background
United Energy is one of Australia's fastest growing energy
companies. It serves approximately 560,000 electricity customers in
Melbourne's south, east and the Mornington Peninsula and 520,000 gas
customers in Melbourne's north and east.
United Energy buys and sells electricity in the wholesale market,
trades related commodities, and sells risk management products. United
Energy also offers energy retailers a range of back office services
including call center, metering, billing and account collection
functions. United Energy's telecommunications business has developed
fiber optic networks in Melbourne, Sydney and Brisbane.
United Energy is listed on the Australian Stock Exchange and has
more than 52,000 predominantly Australian domiciled shareholders. AMP
and UtiliCorp own 57.8% of United Energy.
PULSE ENERGY BACKGROUND
Pulse Energy is set to be Australia's most significant and
innovative energy retailer as a result of combining the strengths of
leading energy companies.
United Energy Ltd., Energy Partnership (Ikon Energy Pty Ltd.),
Shell Australia Ltd., and Woodside Energy Ltd. have formed Pulse
Energy. Pulse Energy will initially service more than one million
electricity and gas customers in Victoria, with the aim of rapidly
becoming a national energy player.
With retail energy markets becoming progressively contestable from
2001, Pulse Energy will have access to potentially 10 million energy
customers in eastern Australia, and will provide Australia's first
large-scale combination of electricity and gas services.
Pulse Energy will provide smart efficiencies for customers and
will deliver innovations such as e-commerce facilities including web-
based bill payments. Additionally Fly Buys points will also be offered
to residential customers.
Pulse Energy combines United Energy's existing customer base and
extensive operating and marketing expertise with Shell's considerable
retail strengths, and the vast gas resources of both Shell and
Press spacebar to pause and continue. Press esc to stop.