ERM POWER BUYS MAJOR STAKE IN OAKEY POWER STATION

Written on the 6 June 2011

ERM POWER BUYS MAJOR STAKE IN OAKEY POWER STATION

INTEGRATED energy company ERM Power Limited (ASX:EPW) has executed agreements to purchase an additional 50 per cent interest in Oakey Power Station from Redbank Energy Ltd in a deal worth $61.7 million.

The acquisition will take ERM Power’s interest in the Oakey Power Station from 12.5 per cent to 62.5 per cent.

Oakey is a two unit peaking power station with dual fuel capability located 150 kilometers west of Brisbane in a high demand growth region and in close proximity to fuel supplies, gas and electricity transmission infrastructure.

ERM Power will utilise existing cash and has put in place a $15.6 million corporate debt facility to fund the acquisition.

Managing director and CEO Philip St Baker (pictured) says the acquisition provides immediate value for shareholders and will provide capacity and energy into the National Electricity Market.

“The purchase price is less than 50 per cent of the estimated replacement cost and the asset is in near new condition due to the fact that it is a peaking power station that has operated less than five per cent of the time over its 11 years of operation,” he says.

“Ultimately, the asset is a peaking power station and is built to operate only in extreme peak electricity load demand times, such as when we have a heat wave in Queensland during summer.

“In addition to these obvious benefits, ERM Power has the skills, experience and complementary businesses to exploit substantial upside from this asset over the short, medium and long term.”

St Baker told Brisbane Business News the asset will be highly valuable to the company both financially and strategically.

“It will not only boost our earnings and profits, but also provide for full vertical integration of our business in Queensland in the future,” he says.

EPW shares remain steady today at $1.58


Latest News

GUVERA ESCAPES WIND-UP ORDER

GUVERA has avoided being wound up after a claim for a $1.78 million debt by Kwong Properties was dismissed at the ...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

WESFARMERS' COAL BUSINESS ON FIRE

WESFARMERS (ASX: WES) has lifted its first-half profit guidance due to surging coal prices and higher than expected c...

SIXTH CONSECUTIVE RECORD PROFIT FOR AP EAGERS

AP EAGERS (ASX: APE) will beat guidance with its sixth-consecutive record profit when it reports its full year result...

Related News

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

SMES TAKE RETAIL MARKET SHARE AS CONSUMERS CHOOSE PERSONALISATION

IN a battle for the hearts and wallets of Australian consumers, it appears that small and medium retail businesses...

KNOWLEDGE WORKERS AMONG MOST SOUGHT AFTER IN 2017

BUSINESSES searching for efficiencies and improved systems are in search of knowledge workers early this year, say...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter