IFM hires banks for $2 billion Pacific Hydro sell-off
Privately held “dark pools” of capital finally exposed
16 April 2015 Australian Financial Review
IFM Investors is seeking to sell renewable energy business Pacific Hydro less than a year after taking a $685 million write-down on the assets.
IFM, whose IFM Australia Infrastructure Fund owns 100 per cent of Pacific Hydro, is understood to have appointed Bank of America Merrill Lynch and Credit Suisse to run an auction after taking pitches from investment banks in recent weeks.
Sources said banks that missed the mandate were notified on Wednesday afternoon.
The sale, which could be worth as much as $2 billion, comes soon after IFM completed a strategic review, looking at reasons why Pacific Hydro took a $685 million write-down in 2013-14.
It will be interesting to see the numbers in Pacific Hydro’s sale documents, once they are released, and how potential buyers value the assets.
Last financial year’s massive write-down was attributed to the impact of the Abbott government’s review of renewable energy, as well as weaker electricity demand in Australia and tax charges in Chile.
More recently, IFM boss Brett Himbury and chairman Garry Weaven resigned from Pacific Hydro’s board.
IFM’s advisers are expected to market Pacific Hydro to private equity firms, Chinese renewable energy companies and the major infrastructure funds.
The sale comes only weeks after IFM’s international fund agreed to pay $7.5 billion for the Indiana Toll Road and as its Australian infrastructure fund prepares for the Port of Melbourne and NSW electricity transmission and distribution auctions.
Original article here
IFM is “owned” by a group of 30 “not for profit” Industry Super Funds. If a member’s fund continues to invest in expensive assets, or makes hundreds of millions in losses, it will be interesting to know what their retirement profit will eventually be.