Infratil has hired Gresham Partners to advise it on the potential sale of its controlling stake in Perth Energy.
The infrastructure investor says the strategic review now underway will consider any options – including sale – that will maximise value for stakeholders. It is expected to take six months.
The proposed sale is the latest as the Wellington-based investor looks to reduce the complexity of its portfolio and recycle capital out of peripheral assets into faster-growing sectors and geographies. The firm has also been reviewing the future of its NZ Bus business.
Infratil shares rose 0.4 percent to $3.45. They have gained almost 4 percent this year.
Perth Energy supplies power and gas to about 2,500 business customers in Western Australia and also operates a 120 MW gas or diesel-fired power station at Kwinana. Infratil has been an investor since 2007.
Perth has struggled since the merger of state-owned Verve Energy and Synergy in 2014 changed the shape of the market there. It was caught with high-priced purchase arrangements and a lack of wholesale hedging options and contributed a $14.1 million operating loss for the March 2017 year.
Infratil replaced the management and halved that loss in the latest March year. In August it said it expected positive earnings from Perth in the current financial year. The firm’s generation arm continued to provide valuable peaking capacity and would benefit from the removal of some coal-fired generation there, Infratil told investors at the firm’s annual meeting.