June 26 (Bloomberg) -- AGL Energy Ltd., Australia’s second-largest electricity retailer, said the competition tribunal’s decision to allow its A$1.51 billion ($1.42 billion) purchase of state-owned power plants should spur further asset sales.
“The implications are that it opens up the field of bidders” in New South Wales and Queensland states, AGL Managing Director Michael Fraser said today by phone. “People won’t have to worry as much about competition concerns.”
The Australian Competition Tribunal yesterday overturned the Australian Competition & Consumer Commission’s March decision to stop AGL’s bid for Macquarie Generation’s two coal-fired power plants. The regulator cited concern AGL’s acquisition of the New South Wales assets would cut competition.
AGL will look at acquiring power assets in Queensland should they come up for sale, Fraser said today. The Queensland government has proposed the sale of assets including electricity generators CS Energy and Stanwell Corp.
“They are an obvious fit for our business,” according to Fraser, who plans to retire by June of next year.
AGL climbed 2.8 percent to A$15.61 today in Sydney trading, the most in four months. Australia’s benchmark S&P/ASX 200 Index gained 1.2 percent.
The state governments of Australia have more than A$100 billion of commercial infrastructure assets that could be sold, Infrastructure Australia estimated in a December report.
New South Wales, Australia’s most populous state, is planning to sell Delta Electricity’s coastal power stations, Vales Point and Colongra, which together have capacity of 1,987 megawatts, according to a government statement in December. New South Wales also plans to raise about A$20 billion leasing almost half of its electricity network.
With the Macquarie Generation purchase, AGL won’t pursue the Delta assets, Fraser said. While the tribunal’s decision can be appealed within 28 days, it “is likely to be final,” according to a June 23 report by Bank of America Merrill Lynch.
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