Macquarie may resell Endeavour Energy stake to Korean investors for $176 mn

  • 2017-09-27

Macquarie Infrastructure and Real Assets (MIRA) is reselling part of stakes in Endeavour Energy, one of Australia’s biggest public energy companies, to South Korean investors, including National Pension Service (NPS) and Public Officials Benefit Association (POBA), for around 200 billion won ($176 million).

The resale comes after a Macquarie Group-led consortium bought a 50.4% stake in Endeavour Energy, for A$7.6 billion, in May from the New South Wales (NSW) government for a 99-year lease. The consortium comprises MIRA, AMP Capital, Qatar Investment Authority and Canada’s British Columbia Investment Management Corporation.

POBA, a retirement fund for South Korea’s local government employees, decided on Sept. 26 to buy A$55 million worth of stakes in Endeavour, according to financial industry sources. NongHyup, South Korea’s national agricultural cooperative, will buy a stake of equal size.

POBA and NongHyup will invest 100 billion won (A$110 million) in aggregate to acquire stakes in Endeavour Energy from MIRA through a vehicle of Hanwha Asset Management Co. Ltd.

Both POBA and NongHyup expect to earn annual returns of 7% to 8% from the stake investment for a 10-year period.

The Hanwha fund of fund closed on 100 billion won, despite strong demand from other Korean institutional investors.

Separately, NPS is in final stages of talks with MIRA directly to buy a stake worth 100 billion won or above in Endeavour. Details about the size of its stake purchase will be finalized around mid-October.

“Given that the NSW government retains the remaining 49.6% stake and electricity transmission networks are regulated business, it is very safe asset,” one of the financial industry sources told the Korean Investors. “Other local institutional investors such as mutual aid associations and pension funds are highly likely to invest in an additional stake (in Endeavour Energy).”

Endeavour Energy supplies electricity to 1 million homes in Sydney and nearby regions in New South Wales.

Since 2015, the NSW government has been selling electricity infrastructure companies including TransGrid and AusGrid to fund the construction of roads, hospitals and schools near Sydney.

Last year NPS invested A$500 million to secure a lease on Australia’s biggest container and cargo port through a consortium for A$9.7 billion, together with China Investment Corporation, Queensland Investment Corporation and other investors.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>