Loy Yang buyout on hold

AGL’s planned buyout of Loy Yang Power remains on hold with a deadline passing yesterday for the company to provide more information on its plans to the competition watchdog.

AGL has previously said it would “obviously comply” with the Australian Competition Consumer Commision’s request for more information, however at the time of publication yesterday AGL had not confirmed with The Express this condition had been met.

Earlier this month the ACCC advised AGL it was “suspending its clearance process” regarding its proposed acquisition of the Greater Energy Alliance Corporation Pty Ltd (owners of Loy Yang A) pending the receipt of further information, due yesterday.

While the ACCC had initially indicated it anticipated providing a response to AGL’s clearance application, paving the way for it to increase its existing 32.54 per cent share in the corporation to 100 per cent, by today, it is believed a new deadline for the decision has yet to be announced yet.

AGL’s purchase of GEAC requires ACCC approval and the removal of Federal Court undertakings limiting its ownership of the corporation to a maximum of 35 per cent.

AGL managing director Michael Fraser previously expressed tentative confidence it would secure clearance.

It is believed a more recent move by Australian Greens leader Christine Milne to have the ACCC investigate her claims that AGL, and other companies, were using their market power to block the roll-out of renewable energy will not help the company’s cause.

It has been reported the ACCC has agreed to Ms Milne’s request.

Meanwhile AGL confirmed it had raised $650 million, via a capital raising exercise, to purchase Loy Yang A.

LYP is awaiting news of AGL’s planned acquisition. If the sale falls through LYP will need to pursue a range of options for refinancing a $565 million parcel of debt by November this year.