Origin Energy Limited (Origin) today announced it had completed the acquisition of Eraring Energy.
On 1 July 2013, Origin announced it had executed a Sale and Purchase Agreement with the NSW Government to acquire Eraring Energy for a net payment of $50 million1 and agreed the terms for cancellation of the Cobbora Coal Supply Agreement including a payment to Origin of $300 million. In addition, Origin announced it had entered into a coal supply agreement with Centennial Coal for the provision of 24.5 million2 tonnes of coal over an eight-year period from FY 2015 for use at Eraring Power Station.
As a result of the successful completion of the Eraring Energy acquisition, the cancellation of rights under the Cobbora arrangements has been completed and the agreement with Centennial Coal is now confirmed, with supply due to commence from FY 2015.
Origin Chief Executive Officer, Energy Markets, Mr Frank Calabria said, "The acquisition of Eraring Energy enables Origin to continue to provide a secure, reliable and affordable supply of energy to millions of Australians while delivering ongoing benefits to our business.
"Origin and Eraring Energy have worked closely together during the past month to achieve a seamless transition to the new ownership arrangements and I am pleased with the high level of co-operation between our two companies.
"I would like to extend a warm welcome to Eraring Energy’s employees and contractors who join our company today and look forward to their contribution to Origin’s future success," Mr Calabria said.
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- Reflects a total purchase price of $659 million net of the expected balance of prepaid capacity charges and funds on deposit with the NSW Government of $609 million at completion, which is expected in Q1 FY14. The deposit balance and pre-paid capacity charge amount reflects the remaining balance of funds for future capacity charges paid by Origin to the State when it entered the GenTrader Arrangements in March 2011.
- Six million tonnes is conditional on the development of Centennial Coal’s Newstan mine extension project.