Powering off Oz assets
Meridian’s Aussie business under review with view to possible sale
Power generator Meridian says its ownership of Meridian Energy Australia (MEA) is under review with a view to a possible partial or full sale. MEA is a vertically integrated electricity business owning 294 megawatts of renewable generation capacity, 150MW of renewable development opportunities and with a retail business branded Powershop Australia, delivering electricity to 140,000 customers and gas to 40,000 customers.
“The ownership review is expected to take a number of months and no decision will be made on the future direction or options for MEA until the completion of that process,” Meridian said in a statement.
Last month, Meridian said it had hired financial advisory firm Lazard to review its Australian strategy amid energy margin pressure and a drop in earnings there.
Meridian owns and operates two windfarms and three hydro stations in Australia to support its Powershop retail arm.
The company’s interim result in February highlighted headwinds in Australia, not helped by state lockdowns and political intervention at both federal and state government level.
Meridian’s Australian operations delivered a 26 per cent drop in earnings before interest, depreciation, amortisation and financial instruments (ebitdaf) to $29 million in the six months to December 31.
Australian energy margin was $59m in the first half, $6m or 9 per cent lower than in the previous corresponding period.
While customer gains drove Powershop Australia’s retail electricity sales volumes 23 per cent higher, lower average prices contracted sales by 5 per cent.
Meanwhile, lower wholesale prices drove a 39 per cent decrease in generation spot revenue and a 32 per cent decrease in the cost to supply customers. Meridian’s Australian assets include the Mt Millar wind farm in South Australia and the Mt Mercer wind farm in Victoria, which between them produce enough energy to power around 116,000 households.
Hydro assets include the Hume and Keepit power stations in New South Wales, and Burrinjuck in Canberra, between them producing
The ownership review is expected to take a number of months.
Meridian
enough energy to power about 58,000 households. A sale of Meridian’s Australian operation would follow in the footsteps of another big transaction involving New Zealandowned wind power generating assets across the Tasman.
In March, Mercury Energy and Australia’s POWAR bought Tilt
Renewables, an Australasian wind farm developer which was spun out of Trustpower, bidding almost $3 billion. Tilt has entered a scheme implementation agreement under which it was proposed that POWAR would acquire its Australian business and Mercury would acquire the New Zealand business.