Herbert Smith Freehills and Ashurst advise on $205m Ecogen sale

Herbert Smith Freehills and Ashurst advise on $205m Ecogen sale

Herbert Smith Freehills has advised IFM Investors on the $205 million sale of its Ecogen business, with Ashurst acting for buyers EnergyAustralia.

Ecogen owns and operates the 510MW Newport power station and 440MW Jeeralang power station, both located in Victoria and making up approximately 9 per cent of Victoria's total generation capacity.

The transaction required both ACCC and FIRB approval, with the ACCC clearing the transaction after targeted market enquiries in December 2017.

The Herbert Smith Freehills team was lead by partner David Ryan, who worked alongside partners Nick Baker, Robert Nicholson, Miles Wadley and Matthew Bull, senior associate Bailee Walker and lawyers Kai Ito, Michael Trent and Dinisi Sirimanne.

Ryan commented that IFM Investors' strategic exit of Ecogen was done in the face of an unsettling resources market.

"There is ongoing uncertainty in the Australian electricity and gas markets," he says.

"Following expiry of the Master Hedge Agreement in 2019, the merchant electricity and gas exposure of the Ecogen asset would have less of a strategic fit for an infrastructure investor such as IFM.

"It is an opportune time for IFM to exit its successful investment in Ecogen.

"As always, it has been a pleasure working with the IFM Investors team."

The acquisition by EnergyAustralia will help the company secure generation capacity and provides its retail electricity business with an important hedge against movements in the wholesale electricity price.

Ashurst's lead partner on the acquisition, Kylie Lane says the firm was pleased to assist EnergyAustralia with the purchase.

"We are delighted to have advised EnergyAustralia on the acquisition of the Ecogen assets from IFM Investors.

"These significant gas-fired generation assets represent 950MW of capacity and are complementary to EnergyAustralia's asset portfolio," she says.

The Ashurst team comprised of:

  • Lynda Tully, Ryan Kabat and Lizzie Bird (Corporate division)
  • Jeff Lynn, Sophie Osborn and Jo Slater (Environment division)
  • Jane Harvey and Abigail Cooper (Employment division)
  • Kellech Smith and Emma Butler (IP/TMT division)
  • Jason Cornwall-Jones, Gaby Stach and Jake Saccardo (Property division)
  • Peter Armitage, Justin Jones, Melissa Barnwell, Jack Heithersay and Roderick Kennedy (Competition division)
  • Kenneth Nguyen (Global Loans division)
  • Geoffrey Mann, Ian Kellock and Bronwyn Kirkwood (Tax division)

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