Event non-ATF Mobile

Summary

  • In June, Infigen Energy announced entering into a bid implementation agreement with Iberdrola, as per which Iberdrola would make an off-market takeover bid for IFN at 86 cents per stapled security in cash. The offer would move along with an extended duration of engagement with IFN, involving the potential cooperation or a control transaction.
  • On 24 July, Iberdrola increased the price of its off-market takeover offer for IFN to 92 cents per Infigen Stapled Security and extended offer for further 2 weeks period.
  • Amid the pandemic crisis, IFN had stated that its employees’ safety remained its top priority, and it took all necessary precautions for them.
  • During May, IFN reported a strong financial position in its Q3 report ended 31 March, with no major impact of the pandemic on its business.

Infigen Energy Limited (ASX:IFN) produces renewable energy through its fleet of wind farms and intends to offer firm supplies of dependable and competitively priced clean energy to Australian companies.

On 17 June, IFN announced about recommended takeover offer from Iberdrola. IFN entered into a BIA (Bid Implementation Agreement) with Iberdrola Renewables Australia Pty Ltd (Iberdrola).

As per the agreement, Iberdrola would make an off-market takeover bid for IFN at a price 86 cents per stapled security in cash.

Iberdrola increased price to 92 cents per Infigen Stapled Security, offer period extended

On 24 July, Iberdrola Renewables Australia Pty Limited announced the increase in the price of its off-market takeover offer for IFN from 86 cents per Infigen Stapled Security to 92 cents per Infigen Stapled Security as it got acceptances for another 13.1 per cent of Infigen Stapled Securities.

It also stated that the additional acceptance includes 13.1 per cent of Infigen Stapled Securities from one or both TCI Funds, as TCI Funds had sent a change of substantial holding notice to Infogen. The notice stated that its holding of IFN Stapled Securities has decreased by 13.09 per cent.

The Board of IFN continues to suggest security holders ACCEPT the Iberdrola Offer as it is the best option available to them. To accept the offer, security holders must fill the acceptance form sent to them by Iberdrola with Iberdrola's original bidder's statement.

Previously, on 3 June, UAC Energy Holdings Pty Ltd had proposed a takeover bid for IFN. Next day, IFN’s Board unanimously recommended its security holders to take no action with regards to the offer made by UAC Energy Holdings Pty Ltd (UAC), till the time IFN’s Board makes any formal recommendation.

The Iberdrola Offer is scheduled to close by (AEST:7.00 pm) on 7 August 2020 (unless extended), and the offer is unconditional.

All the security holders of IFN who will accept the Iberdrola Offer within the offer period will receive Iberdrola Offer Price per Infigen Stapled Security within five business days of the date of receiving IFN’s Security Holder’s valid acceptance.

During May, the Company released its third quarter FY20 report for the period closed 31 31 March. IFN also mentioned four core principles that it had followed, during the crisis period.

Prioritising safety of employees: Out of total IFN’s 86 employees, 78 have been based in head office, who started remote working, and remaining eight are based on operating sites, these site managers are taking additional precautions at Infigen's seven owned wind farms.

The Company minimised the time spent on-site and engagement with communities. At Smithfield, OCGT split shifts had been in place. IFN did not witness any material impacts of the pandemic on operational performance. IFN was well prepared to fulfill the needs arising from the fleet of wind farms and Smithfield OCGT to be operated remotely for some time.

Financial position: IFN reported robust financial position through an unaudited report. On 31 March 2020, IFN's consolidated net debt was AUD 454 million.

Image source: Company’s announcement

Unrestricted cash was at AUD 140 million, with additional AUD 20 million available via an undrawn working capital facility. IFN has two credit facilities - the Corporate Facility and the Bodangora Project Finance Facility. Both the facilities offer a stable medium to long term funding to the Company.

Infigen Energy's customers are partners, and IFN is committed to helping them: Across the past 3 years period, IFN expanded its commercial and industrial consumer base; hence it has a robust consumer contract position. It has nearly 70 per cent of its anticipated renewable energy volumes contracted for the next three financial years—also, strong contracted position for forwarding sales of LGCs.

In accordance with IFN's commitment to being the clean energy retailer of choice for Australian companies, IFN is all set to work with its clients on their changing energy needs. It intends to apply a case by case style if needed and would collaborate with consumers in a way that is comfortable for both and sustainable in the long term.

The fund is allocated to balance the growth and security holders returns: In the wake of the changing economic and project risks, IFN has taken multiple steps to safeguard the interests of the stakeholders through this financial slump.

FY20 outlook: IFN expects approximately 1.9TWh of renewable energy generation to be sold in FY20 with nearly 52 per cent to be sold at AUD 78/MWh to C&I customers. Thirty per cent to be sold at AUD 50/MWh to PPA customers and the volumes that remain to be sold through the merchant channel, with lower merchant revenues expected than in FY 19.

One hundred per cent of its anticipated FY20 LGCs are contracted at an average sales price of AUD 54 per certificate. Asset Operating Costs is expected around AUD 50-55 million, and Business Operating Costs of nearly AUD 25 million.

On 29 July, IFN closed the day's trade flat at AUD 0.920, with a market cap of AUD 893.09 million.

 

 


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