Leading Australian energy infrastructure, APA Group, has announced that it has entered into a deed of company arrangement (DOCA) with regard to the acquisition of Basslink and BPL.
The announcement follows the second creditors’ meeting at which creditors voted to approve the DOCA proposed by APA Group.
Under the proposal, APA Group will acquire Basslink for $773 million, including current estimate of stamp duty and other transaction costs of $33 million. The proceeds of this will be used to repay Basslink creditors, including APA Group’s existing senior secured debt of $648 million.
The acquisition is anticipated to be completed in the coming days. Following entry to the DOCA, the acquisition is now subject to limited conditions precedent – including there being no material adverse change in relation to Basslink.
Basslink is the current owner and operator of the 370 km high voltage direct current (HVDC) electricity interconnector between VIC and TAS. Basslink began operations in 2006 and had a construction cost of approximately $877 million.
The acquisition adds a third electricity interconnector to APA Group’s energy infrastructure portfolio and will be funded from existing debt facilities. APA Group has substantial liquidity available on balance sheet, including $2.2 billion of cash and committed un-drawn debt facilities on hand as of 30 June 2022.
APA Group’s acting CEO, Adam Watson expressed that the acquisition of Basslink is consistent with the group’s strategy to increase its electricity transmission footprint and to play a leading role in the energy transition.
“APA Group is committed to putting Basslink on a sustainable footing and ensuring the cable is ready and able to support Tasmania’s energy security long into the future,” said Watson.
“We look forward to working with the Australian Energy Regulator, the State of Tasmania, the State of Victoria, Hydro Tasmania, energy consumers and other key stakeholders to convert Basslink to a regulated asset.
“As owner and operator of Basslink, a major sub-sea electricity cable, APA Group has expertise to potentially support the development of the Australian offshore wind industry via sub-sea electricity cables.”
For more information, visit APA Group’s website.