Chow Tai Fook Enterprises (CTFE), the Hong Kong conglomerate behind the struggling developer New World Development (NWD), is parting ways with its Australian energy business, Alinta Energy, in a A$6.5 billion (US$4.3 billion) deal with Singapore-based Sembcorp Industries.
The deal, announced in a filing with the Singapore Exchange on Thursday, will see Sembcorp take full ownership of Alinta and its subsidiaries, including Latrobe Valley Power (LVP). The sale comes through Pioneer Sail Holdings, a joint venture between CTFE and Pioneer Sail Singapore.
Alinta is no small player in Australia’s energy scene. It operates a mix of power-generation facilities and a gas and electricity retail business spanning the country. LVP manages the coal-fired Loy Yang B Power Station in Victoria’s Latrobe Valley, while the group also has a hand in renewable projects like the Yandin Wind Farm in Western Australia and the Spinifex Offshore Wind development off Victoria’s coast.
For CTFE, the sale represents the culmination of an eight-year journey. The conglomerate bought Alinta in 2017 for A$4 billion, marking its first major step into Australia’s energy market. By June this year, Alinta had grown to a book value of A$2.5 billion and pre-tax net profits of A$530 million, with cash flow having doubled under CTFE’s management.
Henry Cheng Kar-shun, chairman of Chow Tai Fook Group, said the company was proud of what it had achieved. “Our investment in Alinta has played an important role in providing reliable and affordable energy to Australians,” Cheng said. “I’m immensely proud of what the CTFE and Alinta teams have accomplished on the energy transition journey. We are excited for Alinta’s next chapter with Sembcorp and look forward to seeing the company continue to grow under their leadership.”
Sembcorp, for its part, called the acquisition “an attractive portfolio” that includes 10.4 gigawatts of renewable energy and firming systems. It highlighted Alinta’s strong track record as a platform for expansion in a developed market. The deal is still subject to regulatory approval.
The sale also comes against a backdrop of financial strain for NWD. In October, the Hong Kong developer secured a HK$5.9 billion (US$758 million) loan from Deutsche Bank, using its Victoria Dockside project as collateral. Earlier this year, NWD narrowly avoided default by refinancing HK$88.2 billion in debt, while reports suggest it may return a shopping centre near Hong Kong International Airport to the Airport Authority.
