Annual Review 2006 - PwC

Case
Study
Alinta:
Filling
the gaps
Since listing on the Australian Stock Exchange in October 2000,
Alinta has grown to become one of Australia’s leading energy
infrastructure companies. The company’s value has increased from
$300 million at the fl oat to more than $6 billion in six years, wielding
a diversifi ed portfolio of operations and investments that span
Australia and New Zealand.
PwC has provided services to Alinta since 2002, ranging from
tax and legal to assurance and advisory. The fi rm’s team is fully
integrated with Alinta’s internal transaction team to maximise
outcomes and ensure a solid understanding of Alinta’s needs
and challenges.
In 2006, PwC helped Alinta successfully fi nish the lengthy process
of acquiring the infrastructure assets of Australian gas and
electricity provider AGL. The two-year transaction went through a
number of iterations and was complicated by the fact that Alinta
only had access to AGL’s publicly released fi nancial information.
PwC was given the role of fi nding ways to fi ll the information gaps
to ensure the acquisition and anticipated synergies would not
expose Alinta and its shareholders to undue fi nancial and tax risk.
ENERGEX:
Changing
directions
Between late 2005 and early 2006, the Queensland Government
announced a range of reforms for the energy sector, requiring
signifi cant transformational change across ENERGEX. At the time,
the ENERGEX business included distribution of natural gas and
liquefi ed petroleum gas, in addition to electricity distribution and
the energy retailing arm of ENERGEX Retail. The reforms
culminated in the trade sale of the gas and retail assets, with
proceeds exceeding $2 billion.
This sales process required the scoping and implementation of a
signifi cant program of work driven by a tight timetable. ENERGEX
was faced with delivering on the transitional arrangements, as well
as separating and realigning the remaining electricity distribution
business from the sold entities.
PwC’s broad relationship with ENERGEX enabled the fi rm to
provide a wide range of services throughout the transformation.
Program management advisory services from PwC Performance
Improvement were leveraged with industry expertise to meet the
milestones and manage the risks associated with completing the
project. The Brisbane offi ce’s Transactions and Assurance services
were also used to assess the appropriateness of the resulting
agreements, while Tax & Legal assisted in scoping the work plans
The fi rm’s due diligence work and fi nancial modelling in these areas
were suffi cient to meet the requirements of ASIC and the ATO, and
the resulting regulatory approvals contributed to an overwhelming
positive vote from shareholders. Alinta was able to complete the
transaction, nearly doubling its market capitalisation overnight.
“We manage all the assets we
acquire, so the fact that PwC
understands our underlying systems
and processes ensures we’re
getting the numbers right and being
as efficient as possible.”
Ian Wells, Group Manager of Planning and Investment Analysis
Alinta
required to virtually and physically separate the cash fl ows of the
businesses being sold.
With PwC’s assistance, ENERGEX was able to meet the tight
deadlines and achieve a successful sale.
“As part of a panel of strategic
consultants, PwC was engaged to
provide a broad range of services
including professional advice and
program management of the sale
process. The relationship with
PwC during this process enabled
ENERGEX to access these services,
sometimes at very short notice.”
Craig Mortensen, CFO
ENERGEX Ltd
Annual Review 2006 43