The deal comes amid uncertainty in the markets, one partner says
Ashurst and Herbert Smith Freehills (HSF) acted as the lead legal advisers on the sale of two major power stations in Victoria.
Ashurst acted for EnergyAustralia, which acquired Ecogen Energy for $205m from IFM Investors, which tapped HSF as its law firm of choice. Ecogen is the owner and operator of the 510MW Newport Power Station and the 440MW Jeeralang Power Station, which are peaking and intermediate-load generation providers.
Both stations provide about 9% of Victoria’s generation capacity. Ecogen has operated the stations under a master hedge agreement with EnergyAustralia and its predecessors since 1999. The agreement is expiring next year.
IFM bought a stake in Ecogen in 2003 and acquired the whole company in 2008. Kyle Mangini, IFM Investors’ head of global infrastructure said the investment has provided an equity return of more than 12%.
Partner Kylie Lane led the Ashurst team. Support came from counsel Lynda Tully and lawyers Ryan Kabat and Lizzie Bird (corporate); partner Jeff Lynn and senior associates Sophie Osborn and Jo Slater (environment); partner Jane Harvey and senior associate Abigail Cooper (employment); partner Kellech Smith and counsel Emma Butler (IP/TMT); partner Jason Cornwall-Jones, senior associate Gaby Stach, and lawyer Jake Saccardo (property); partner Peter Armitage, counsel Justin Jones, and lawyer Melissa Barnwell, Jack Heithersay, and Roderick Kennedy (competition); partner Kenneth Nguyen (global loans); and partners Geoffrey Mann and Ian Kellock, with senior associate Bronwyn Kirkwood (tax).
Partner David Ryan led the HSF team, which included partners Nick Baker, Robert Nicholson, Miles Wadley, and Matthew Bull. They were supported by senior associate Bailee Walker and lawyers Kai Ito, Michael Trent, and Dinisi Sirimanne.
“There is ongoing uncertainty in the Australian electricity and gas markets. Following expiry of the Master Hedge Agreement in 2019, the merchant electricity and gas exposure of the Ecogen asset would have less of a strategic fit for an infrastructure investor such as IFM. It is an opportune time for IFM to exit its successful investment in Ecogen,” Ryan said.
