Alinta Gas’ acquisition of United Energy, MultiNet & Ikon Energy

© Utility Consultants Ltd 2003

Prepared by Utility Consultants Ltd

www.utilityconsultants.co.nz

Disclaimer

This research report is of a generalnature, and is not intended as specific

professional advice. Accordingly, neitherUtility Consultants, nor its’ directors andshareholders, shall be liable for any lossor damage arising from action or inaction

based on this research report.

Contents

Disclaimer

Contents

Introduction

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Formation ofAquila’s interests

in Australia

The Alintatransaction

Introduction

Aquila’s Australian interestsare a complex intertwining ofshareholdings that includesAMP as a major investment

partner

As part of its’ globalwithdrawal, Aquila plans tosell its stakes in a complexdeal that will see Alinta Gasacquire a stake in one of its’

parent entities

This report examinesthe formation of Aquila’sAustralian interests, and

the Alinta transaction

Formation ofAquila’s interests

in Australia

Formation of Aquila’sinterests in Australia has

followed three parallel paths

Acquisitionof United Energy

in Victoria

Acquisitionof MultiNet and IkonEnergy in Victoria

Acquisitionof Alinta Gas in

Western Australia

Disaggregation of the SECVand transfer of the MunicipalElectricity Undertakings intothe five distribution entities,

one of which is United Energy

1994

United Energy acquiredby the Power Partnership forA$1.55b. Power Partnershipis owned 59.13% by Aquila

and 40.87% by AMP

1995

United Energy lists onthe ASX, Power Partnership

sells down 42% to 93,000public shareholders in the

form of 171.4 million stapledsecurities

1998

Formation of UEcommand Utili-Mode in 1997 and

1998 respectively

Public sale of 35.6%of UEcomm in 2000values it at A$950m

Sale of retail businessto Pulse Energy, formed inconjunction with Shell, Ikonand Woodside to operate in

the national market

2000

Formation of energymerchant business EdgeCapin association with Shell and

Woodside

2000

United Energy sells itsstakes in Utili-Mode, Pulse

and EdgeCap to AGLfor A$121m

Energy Partnershipacquires MultiNet and IkonEnergy (stapled retailer) –

25.5% owned by Aquila and74.5% owned by AMP

1999

United Energyawarded contract tomanage the MultiNet

Ikon businesses

1999

Integration of Ikoninto the national dual-fuel

retailer Pulse Energy

2000

Privatisation of AlintaGasin WA saw Aquila and UnitedEnergy acquire 50% each ofa 45% corner-stone share-

holding for A$319.5m

2000

AlintaGas

Public

WA GasHoldings

UnitedEnergy

PowerPartnership

AMP

Aquila

EnergyPartnership

MultiNet

IkonEnergy

55%

45%

50%

43%

57%

74.5%

25.5%

59%

41%

100%

100%

Overall ownership structure

50%

Aquila’s stakes

MultiNet

IkonEnergy

AlintaGas

UnitedEnergy

25.5% indirect stake

25.5% indirect stake

33.6% indirect stake

33.5% indirect stake

The Alintatransaction

The Alinta transactioninvolves the following

3 broad actions

Power Partnershipbuying 43% of United

at $3.15 per share

Alinta and AMPbuying the following

stakes

Formation of a newentity called the AMPHenderson Utilities

Fund

Aquila’s 59% stake inPower Partnership at

$3.15 per share

Aquila’s 50% stakein WA Gas Holdings

Aquila’s 25.5% stakein Energy Partnership

AlintaGas

Public

WA GasHoldings

UnitedEnergy

PowerPartnership

AMP

Aquila

EnergyPartnership

MultiNet

IkonEnergy

55%

45%

50%100%

74.5%

25.5%

59%

41%

100%

100%

Step 1 – Power Partnership buys 43% of United

50%

AlintaGas

Public

WA GasHoldings

UnitedEnergy

PowerPartnership

AMP

Aquila

EnergyPartnership

MultiNet

IkonEnergy

55%

45%

50%100%

74.5%

25.5%

100%

100%

100%

Step 2a – Aquila sells stake in Power Partnership

50%

AlintaGas

Public

WA GasHoldings

UnitedEnergy

PowerPartnership

AMP

Aquila

EnergyPartnership

MultiNet

IkonEnergy

55%

45%

50%100%

74.5%

25.5%

100%

100%

100%

Step 2b – Aquila sells stake in WA Gas Holdings

50%

AlintaGas

Public

WA GasHoldings

UnitedEnergy

PowerPartnership

AMP

Aquila

EnergyPartnership

MultiNet

IkonEnergy

55%

45%

50%100%

100%

100%

100%

Step 2c – Aquila sells stake in Energy Partnership

50%

AlintaGas

Public

AMP

55%

45%

20%

80%

Step 3 – Form AMP Henderson Utilities Fund

UnitedEnergy

MultiNet

IkonEnergy

AMP Henderson Utilities Fund

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