APA acquires interest in debt of Keppel Infrastructure Trust's Aussie subsidiary Basslink

AUSTRALIAN energy infrastructure business, APA Group, has acquired an interest in the debt of Keppel Infrastructure Trust's (KIT) A7RU Australian subsidiary Basslink, valued at about A$99 million (S$97.5 million), the company said on Monday (Nov 22).

This comes after Basslink went into voluntary administration earlier this month on Nov 12 amid ongoing disputes with its customer, state government-owned Hydro Tasmania, and an unsuccessful sale process with APA.

Basslink owns and operates a 370km high voltage direct current electricity interconnector between Victoria and Tasmania in Australia.

As the only power cable between Tasmania and mainland Australia, the electricity interconnector, which provides two-way access to 500 megawatts of electricity, is critical to the export of Tasmanian renewable energy to Australia's mainland.

The Tasmanian government had indicated in October that it was taking legal action against Basslink over A$70 million owed by the company because of a months-long outage that began in late 2015. (see amendment note)

APA, in its announcement of the debt acquisition on the Australian Securities Exchange on Monday, declared that it is interested in buying Basslink from its receivers and managers.

If successful, APA will work with Hydro Tasmania, the State of Tasmania, the Australian Energy Regulator and other key stakeholders to convert Basslink to a regulated asset, APA stated.

The debt with a face value of about A$99 million, which APA bought over from Nexus Australia Management, Basslink's borrowing entity, was acquired at a discount and funded from APA's existing debt facilities, it added.

Rob Wheals, APA's chief executive officer and managing director, meanwhile, said the potential acquisition of Basslink is consistent with its strategy to expand its electricity transmission footprint and invest in renewable energy sources.

Units of KIT ended S$0.005 or 0.9 per cent lower at S$0.545 on Nov 19.

Amendment note: An earlier version of this article gave the incorrect currency for the amount Basslink owed for its months-long outage.