Aug. 22 (Bloomberg) -- Origin Energy Ltd., Australia’s largest electricity retailer, obtained A$7.4 billion ($6.6 billion) in bank loans to refinance debt and bolster funding after its liquefied natural gas project begins.
The interest cost is consistent with its existing bank debt, Sydney-based Origin said today in a statement as it posted a 15 percent drop in full-year underlying profit. The shares rose the most in more than four years.
Origin needs about A$4.1 billion to fund its share of the LNG venture with ConocoPhillips in Queensland through first production in 2015, according to a separate statement. The new loan is underwritten by Australia & New Zealand Banking Group Ltd., Bank of America Corp. Merrill Lynch, Goldman Sachs Group Inc., JPMorgan Chase & Co. and UBS AG.
The A$24.7 billion Australia Pacific LNG project is about 45 percent complete and is on schedule to deliver first LNG by mid-2015, Origin said today. The venture is one of seven Australian LNG projects being built to meet Asian demand.
Origin shares rose as much as 7.4 percent to A$13.18 in Sydney, the most since Feb. 5, 2009. They were at A$12.99 as of 12:29 p.m. local time, while the benchmark index declined 0.7 percent.
Origin is fully funded for the LNG venture, it said. The company will fund its share of the Queensland project with cash and existing debt facilities, the company said.
“We have the liquidity to fund our investment in APLNG,” Managing Director Grant King told reporters today on a call. The risks to the development’s budget and schedule are decreasing as the availability of labor improves, he said.
Origin’s underlying profit dropped to A$760 million in the 12 months ended June 30, from A$893 million a year earlier, the company said. That compares with the A$753.6 million average estimate of 10 analysts in a Bloomberg survey. Net income dropped 61 percent to A$378 million, Origin said.
Origin in February reported a 7 percent cost increase at the LNG project and cut its forecast for annual profit for the second time in three months, estimating underlying earnings would be 10 percent to 15 percent below the previous year.
To contact the reporter on this story: James Paton in Sydney at email@example.com
To contact the editor responsible for this story: Jason Rogers at firstname.lastname@example.org