AGL Energy Ltd. (AGK), an Australian renewable energy company, approached banks to help arrange A$1 billion ($1.05 billion) of loans to refinance debt, according to three people familiar with the matter.
The revolving credit facilities may be arranged as a so- called club transaction, one of the people said, asking not to be identified as details are private. In a revolving credit facility money that’s been repaid can be borrowed again.
Policies in Australia to encourage the development of renewable energy projects will drive at least A$36 billion of investment by 2020, according to a Bloomberg New Energy Finance forecast. About A$28 billion will be spent building large-scale power projects such as wind farms while a further A$8 billion will be invested by households and businesses in smaller rooftop solar systems, the May 2 report said.
AGL, based in Melbourne, sold its 67.2-megawatt wind park in the state of Victoria earlier this week and will continue to develop the project until completion in early 2012. Australian utilities are recycling investments in renewable energy assets and keeping the electricity for their own use to help fund new projects while meeting emissions goals.
The company has an A$886 million syndicated loan maturing in October, according to data compiled by Bloomberg. That facility should be refinanced prior to the company announcing its full-year 2011 financial results, according to a May 4 presentation by Chief Executive Officer Michael Fraser. It’s due to announce its annual results on August 25, according to the company’s website.
AGL’s head of capital markets, John Hobson, declined to comment when called at his office in Sydney.
Refinancing debt
Royal Bank of Scotland Group Plc and Westpac Banking Corp. helped arrange the A$886 million facility in 2006, according to data compiled by Bloomberg. AGL has about A$1.5 billion of loans maturing before the end of next year, the data show.
TRUenergy Holdings Pty, a unit of Hong Kong’s CLP Holdings Ltd. (2), signed A$2.05 billion of loans earlier this week, Bloomberg data show. TRUenergy and Sydney-based Origin Energy Ltd. (ORG) outbid AGL in December for state electricity assets worth A$5.3 billion. TRUenergy bought assets including retailer EnergyAustralia, while Origin gained Country Energy and Integral Energy.
AGL shares were trading A$0.02 higher at A$14.24 as of 1:09 p.m. in Sydney
