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Allens and Linklaters advise on groundbreaking power asset transactions

17 May 2013

Allens and Linklaters have jointly advised State Grid International Development Limited, a wholly owned subsidiary of Chinese State-owned enterprise State Grid Corporation of China, on two of Australia's largest power asset transactions.

Under the terms of the two transactions, State Grid has agreed to acquire from Singapore Power International Pte Limited (the international operating arm of Singapore Power Limited):

  • 19.9 per cent of the stapled securities in SP Ausnet, an ASX-and SGX-listed Australian entity that builds, owns and maintains regulated electricity transmission and electricity and gas distribution assets in Victoria; and
  • a 60 per cent interest in SPI (Australia) Assets Pty Limited, a private Australian company trading as Jemena that builds, owns and maintains gas distribution and transmission, electricity, distribution and water assets in Victoria, Queensland, NSW and the ACT.

SP Ausnet and Jemena are two of Australia's largest utilities, with total assets of approximately A$10 billion and A$8.9 billion respectively. State Grid Corporation of China is the world's largest utility and was ranked seventh on the Fortune Global 500 list in 2012 with revenue of approximately US$300 billion.

The transactions are subject to customary regulatory approvals in Australia and China. Following completion, Singapore Power will retain a 31.1 per cent interest in SP Ausnet and a 40 per cent interest in Jemena. The matter was led by Linklaters partners Thomas Ng and Judie Ng Shortell, both based in Beijing, and Allens partners Anna Collyer and Wendy Rae, both based in Melbourne.

Linklaters partner Judie Ng Shortell said:

'We are pleased to have advised State Grid on these groundbreaking investments in the Australian power sector. This transaction highlights our ability to advise world-class clients on world-class transactions. The strength of the relationship between our firms meant that we were able to provide State Grid with a seamless and integrated team, spanning multiple offices and practice areas.'

Allens partner Wendy Rae noted that the size and complexity of the transactions required both public and private M&A input, energy sector expertise and contributions from finance, tax, employment and property specialists.

'The transactions showcased the quality and depth of the Allens and Linklaters teams, drawing from the combined resources at each firm to provide State Grid with the best team for the job.'

Allens partner Anna Collyer said:

'The proposed investments by State Grid are two of the most significant power asset deals in Australia. They reflect the strength of the Australian power sector, and in particular the attractiveness to investors of a transparent and stable regulatory regime. Investment of this nature benefits the industry and the Australian economy more broadly due to the capital and expertise that can be contributed by investors such as State Grid.'

The Allens and Linklaters alliance has now been in place for 12 months and these transactions are the most significant deals of the alliance so far.

Linklaters previously advised State Grid on its landmark acquisitions of 25 per cent of the share capital of REN – Redes Energ├ęticas Nacionais, SGPS, S.A., a Portuguese gas and electricity transmission company – the first investment by a Chinese investor in Europe's power and gas transmission sector. Allens and Linklaters also jointly advised State Grid on its recent acquisition of a 46.56 per cent interest in South Australian electricity transmission business ElectraNet Pty Limited.

Linklaters partner Thomas Ng said:

'Our track record of advising State Grid on strategically important transactions clearly demonstrates the strength of our global offering in the energy and resources and infrastructure sectors. It underlines the depth of our relationship with major Chinese corporates and the ability of our integrated cross-border and cross-practice area teams to help Chinese clients around the globe as they further develop their international presence.'

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Notes for editors.

Allens is a commercial law firm working throughout Australia and Asia. Through its integrated alliance with Linklaters it provides clients access to 40 offices in 28 countries around the world.