Cheung Kong, China Suitors Said to Plan Bids for Australian Grid

  • Transmission network lease could fetch more than A$10 billion
  • China Southern Power Grid partners with Qatari sovereign fund

State Grid Corp. of China, the nation’s biggest electricity distributor, and billionaire Li Ka-shing’s Cheung Kong Infrastructure Holdings Ltd. are among suitors planning to submit bids for Australian power network Ausgrid, people with knowledge of the matter said.

State-owned China Southern Power Grid Co. also plans to submit an indicative offer with Qatar Investment Authority for the Ausgrid lease by the Feb. 29 deadline, according to the people. The 50.4 percent holding in Ausgrid, which is being sold by the New South Wales state government, could fetch more than A$10 billion ($7.2 billion), the people said, asking not to be identified as the information is private.

Australian assets, including ports, power networks and properties, are attracting increasing interest from overseas buyers drawn to the nation’s stable economic growth. Buyers from greater China announced $15.5 billion of acquisitions in Australia last year, up 55 percent from 2014, data compiled by Bloomberg show.

The bidders have begun sounding out banks for financing, according to the people. The New South Wales government is offering a buyer a partial long-term lease to operate Ausgrid while retaining ownership of the asset.

A Beijing-based spokesman for State Grid didn’t immediately respond to faxed questions, while a representative for China Southern Power Grid didn’t answer phone calls and an e-mail seeking comment. A Hong Kong-based spokeswoman for Cheung Kong Infrastructure didn’t respond to calls and an e-mail seeking comment.

“The Ausgrid transaction is progressing well with strong interest shown from the market,” a representative for New South Wales Treasurer Gladys Berejiklian said in an e-mailed statement, declining to comment on specific bidders. “We expect to receive indicative bids shortly and are on track to announcing the successful bidder by the middle of 2016.”

The New South Wales government in 2014 appointed Deutsche Bank AG and UBS Group AG as advisers to sell the 50.4 percent Ausgrid lease. State premier Mike Baird, a former banker at Deutsche Bank, has funded new roads and hospitals with asset sales including the power transmission company TransGrid and leases to several ports.

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