Snowy Hydro float

[donnie]

Snowy could be a good float to get into. Snowy could well be taken over within the first year if their results are good.

Time's right for tapping into Snowy Hydro float

April 15, 2006

THE time is ripe for the $2.7 billion float of the Snowy Mountains hydro-electric scheme, analysts say, with market hunger for a big float adding to already strong strong demand for energy stocks.
Investor enthusiasm for large initial public offerings (IPOs) was recently demonstrated by the highly successful $1.1 billion float of the world's second-largest explosives firm, Dyno Nobel Ltd.

Dyno Nobel shares listed on the Australian Stock Exchange (ASX) at a hefty 17 per cent premium to their issue price on April 7, as investors who missed out on the highly prized float pushed the stock higher.

And the Snowy Hydro IPO, which is expected to be one of the largest floats the Australian market has seen in years, is set to benefit from the current favourable market conditions and strong appetite for new shares.

Intersuisse energy analyst Peter Arden said it was a good time for Snowy Hydro to go public. "Snowy Hydro will really benefit from the current market conditions," he said.

"The market is also very hungry for infrastructure investments and we've seen that time and time again."

The Snowy Hydro scheme - the largest supplier of renewable energy in Australia - is expected to release a prospectus next month and is aiming to list on the ASX in June.

Analysts are expecting the float to fetch between $2.5 billion and $2.7 billion.

The NSW Government announced it would sell its 58 per cent stake in the scheme in December, with the Victorian and federal governments agreeing to sell their respective shareholdings last month.

An analyst, who did not want to be named, said the market was very keen on big cap and energy stocks at the moment.

"It's the only pure generator in the Australian market, so from an investor point of view it's going to be a pretty special sort of an asset," he said.

"If you take a view that the long-term trajectory of power prices is up, it will be the only stock that you can buy that gives you a pure exposure to that."

[BRICKS]

THIS is more than complex with trouble to boot the main thing is they the Snowie are at near capacity now to power generation will cost a lot of money for what,, also whats the NSW gov going to do with there money in the mean time NSW gov they are out there on the Central Coast building Gas Turbine generators ,, will be good to watch.. [8D]

[donnie]

article from bloomberg

Snowy Hydro Needs to Raise Funds to Stay Competitive, CEO Says
April 16 (Bloomberg) -- Snowy Hydro Ltd., which is planning an initial share sale this half, needs to raise funds to invest in its power supply infrastructure and remain competitive, Chief Executive Officer Terry Charlton said.

Snowy Hydro's share sale may raise A$3 billion ($2.2 billion), EL & C Baillieu Stockbroking Ltd. estimates. UBS AG, Macquarie Bank Ltd. and Goldman Sachs JBWere Pty were hired last month by the company's owners, the federal, Victorian and New South Wales governments, to sell the stock.

``What we're seeing now is an evolution of the electricity industry and we have to be a continuing player,'' Charlton told Nine Network's Business Sunday program today. ``That is going to require further investment that is beyond our borrowing capability or our cash flow.''

Snowy, which owns a 3,756-megawatt hydropower system in Australia's Southern Alps, supplies about 74 percent of the renewable energy in eastern mainland Australia. It can start generating power within 90 seconds, allowing it to benefit from surges in wholesale prices at peak-demand periods. Peak power demand in eastern Australia, the nation's most populous area, is forecast to rise 35 percent by 2015.

Charlton declined to say how much Snowy Hydro plans to raise in the IPO after funds have been paid to its owners.

``What we're looking for is access to future capital and that's achieved by being listed,'' he said. ``If we don't continue to grow with the market, then the Snowy scheme runs the risk of becoming less important.''

The system, which took more than 25 years to build, includes seven power stations, 145 kilometers (90 miles) of tunnels and pipelines and 16 dams with a total storage capacity about 13 times the volume of Sydney Harbor.

The company has been expanding its business to include gas- fired generation and energy retailing.

Last year it paid A$243 million for the Valley Power gas- fired generator. It is building a A$150 million gas-fired plant near Melbourne to further add to its capacity to meet peak- period electricity demand. The company also owns the Red Energy power retailing business in Victoria state.

[donnie]

Snowy Hydro to have share limits
Email Print Normal font Large font April 14, 2006 - 5:54AM


Limits will be put on the amount one individual shareholder can purchase when the Snowy Mountains hydro-electric scheme is listed on the Australian Stock Exchange later this year.

The ownership caps, expected to be set at either 10 or 15 per cent, are to prevent control of the energy company falling into the hands of a big overseas company or a local rival.

However, these caps will only be applied for a fixed number of years allowing larger shareholdings in the future, the Sydney Morning Herald newspaper reports.

The report says the imposition of ownership caps has been strongly debated by government officials, with some fearing it could have an impact on the full sell-off price.

Analysts are currently expecting the float to fetch between $2.5 billion and $2.7 billion.

The Herald article also reports that Snowy Hydro will delay its listing on the ASX and will not start trading until July, not June as had been expected.

The Snowy Hydro scheme - the largest supplier of renewable energy in Australia - is to be sold after the NSW government announced it would sell its 58 per cent stake in the scheme in December, with the Victorian and Commonwealth governments agreeing to sell their respective shareholdings last month.

[donnie]

This is a bit of info to anyone wanting to invest.

http://www.cultureandrecreation.gov.au/articles/snowyscheme/

[donnie]

Snowy Hydro Planned Share Sale Attracts Interest, Investors Say

April 5 (Bloomberg) -- Snowy Hydro Ltd.'s planned initial share sale is attracting interest because of the company's dominance in eastern Australia's peak power supply market and its low debt, which will allow expansion, fund managers said.

Snowy Hydro's share sale, due this half, may raise A$3 billion ($2.2 billion), EL & C Baillieu Stockbroking Ltd. estimates. UBS AG, Macquarie Bank Ltd. and Goldman Sachs JBWere Pty were hired last month by the company's owners, the federal, Victorian and New South Wales governments, to sell the shares.

Snowy, which owns a 3,756-megawatt hydropower system in Australia's Southern Alps, supplies about 74 percent of the renewable energy in eastern mainland Australia. It can start generating power within 90 seconds, allowing it to benefit from surges in wholesale prices at peak-demand periods. Snowy has A$250 million of debt due in October and over A$100 million of un-drawn bank loans, Standard & Poor's Ratings Service says.

``You've got a strong asset with monopoly-like characteristics that is not financially burdened with debt so it has a lot of flexibility to grow the business,'' said Jason Teh, who helps manage about $4.1 billion including utility stocks at Investors Mutual Ltd. in Sydney. ``There's definitely demand for an investment like this. If it's a good price, we'll certainly try and get a stake.''

Snowy Hydro's hydroelectric system includes seven power stations with 31 generating units, 145 kilometers of tunnels and pipelines and 16 dams with a total storage capacity of 7,000 billion liters, or 13 times the volume of Sydney Harbor. The system was built over 25 years starting in 1949, involving more than 100,000 workers from more than 30 countries.

BBB+

Peak power demand in eastern Australia, the nation's most populous area, is forecast to rise 35 percent by 2015.

Snowy Hydro's ``robust'' system is underpinned by ``very low forced outage rates, high availability at peak times, and fast generator start-up times,'' Standard & Poor's said in a March 24 report. Its generation is ``enhanced by its large water storage, which is capable of holding the equivalent of two years of average in-flows,'' it said.

The ratings company last month affirmed Snowy Hydro's credit rating at BBB+ after analyzing its proposed share sale. Snowy Hydro's electricity hedging contracts with power retailers allow it to lock in about A$300 million of earnings before interest, tax, depreciation and amortization a year, irrespective of demand and prices, it said.

Ratings Cut

Rival ratings company Moody's Investors Service in February cut its rating on Snowy Hydro to Baa1 from A3 on the governments' decision to sell the company, and said it may cut the rating further. Snowy's ``exposure to wholesale electricity prices, volatility in the electricity market and the risks associated with its trading'' are considered to suit a Baa1 rating, it said.

Snowy also provides voltage control services and emergency start-up power capacity for Australia's National Electricity Market, the wholesale power market in eastern Australia that started in 1998.

``The earnings of the business have been ramped up considerably in recent years by making use of the deregulated market for electrical power,'' said Roly Michelmore, who helps manage about $2 billion including utility stocks at Adelaide- based Argo Investments Ltd. ``Clearly the business will be of great interest to the investment community. There is little doubt it will be floated successfully.''

Investors including Mutual and Argo attended a briefing last week providing initial information on the Snowy Hydro initial share offer.

`Transparent Financials'

Snowy may offer a dividend yield of about 4 percent for investors, as well as capital growth, Teh said. That yield compares with an average of 3.83 percent for the Australian Stock Exchange's benchmark utilities index and is lower than the yields offered by SP AusNet and Spark Infrastructure Group, wh

[laurie]

And the $64,000 Q is how much! so called mums & dad IPO price would have to be right to attract retail investors otherwise a $5+ float would count out most me included unless I sell off other shares to buy in! :([V]

cheers laurie

[BRICKS]

IT is quit notable that your keen to be in donnie.. [8D]

[donnie]

Im not really interested in investing in it at the moment.[8D]
Maybe when it list and has a few month of trading, then i might look into it.[:p]
I just wanted to bring the info together for future reference.:D;)