Orion New Zealand Limited acquires
shareholding in Energy Developments Limited 26 July 2002 Orion New Zealand Limited announced today that it has acquired a 10% shareholding in Energy Developments Limited ("EDL"), a listed Australian renewable energy company. The shareholding of approximately 11.5m shares has been acquired for a total purchase price of approximately NZ$48 million. Orion Chairman, Linda Constable, said "the renewables energy sector has significant growth potential internationally. EDL, with its world class expertise in landfill gas and waste-to-energy projects, is well positioned to participate in the growth of these sectors, particularly in the European and US markets." EDL currently has close to 400 MW of total plant either operational or under development. Nearly half the current capacity is landfill gas generation and this is expected to continue to expand. Potentially EDL may also become a significant global player in the waste to energy sector. It is continuing the development of a commercial scale fully operational project, which will, if successful, give the company a strong competitive position in this market. The EDL Solid Waste to Energy Recycling Facility (SWERF®) is considered to offer a potential cost competitive solution for the minimisation of landfill volumes with integrated recycling and energy capture from the waste stream. European markets for this technology are considered to be particularly significant and are supported by recent (1999) European Union directives setting out specific and significant landfill reduction targets. Orion already has significant investments in the energy sector in addition to its core investment in the Canterbury electricity network. These include: - Whisper Tech (41%)
Whisper Tech develops and manufactures small scale domestic co-generation systems. - TransFlux (100%)
TransFlux manufactures and markets an innovative and energy efficient fluid heater. - Energetics Pty Ltd (36%)
Energetics is Australia's leading energy and greenhouse gas management consultancy. - CIC Global (50%)
CIC Global internationally develops and markets electronic electricity metering and information technologies. The investment in Energy Developments further complements Orion's investments in the sustainable energy area. Orion will use existing bank facilities as the funding source for this investment. The acquisition involves the purchase of existing shares and the placement of new ordinary shares in EDL. Exiting EDL shareholder, NRG Energy, is withdrawing from the Asia Pacific region as part of an aggressive plan to improve its balance sheet. Orion and EDL have agreed a shareholders' agreement that will be presented to EDL shareholders for approval at that company's Annual General Meeting. Chris Laurie, Managing Director of Orion, has accepted an invitation to join the board of EDL. Infratil Limited has today also announced that it has acquired a 10% shareholding in EDL. For more information: Linda Constable
Chairman
Phone (03) 312 9111 or Chris Laurie
Managing Director
Phone (03) 363 9800 Questions and Answers Q.
What has Orion purchased? A.
Orion has purchased a 10% stake in the listed Australian company Energy Developments Ltd for approximately $48m. EDL has an Australian and international portfolio of power generation from renewable and waste fuels. It is also involved in developing an innovative waste to energy and recycling process.
Q.
How big is EDL? A.
EDL has revenues of around A$100m and owns power stations with a total generating capacity of 400MW (for comparative purposes Christchurch city has a peak electricity demand of approximately 500MW). EDL currently has a market capitalisation on the ASX of approximately A$350m (NZ$400m).
Q.
Infratil has also purchased 10% of EDL, who is Infratil? A.
Infratil Limited is a New Zealand listed company that specialises in infrastructure investments. Some of its shareholdings include Wellington Airport, Glasgow Prestwick International Airport, Port of Tauranga and Trustpower. The Infratil website is www.infratil.com
Q.
Could the new solid waste to energy and recycling facility (SWERF) process being developed by EDL have applications in Christchurch? A.
The commercial viability of the SWERF process depends on an income from waste disposal fees, recycling revenues and electricity sales above a certain level. It may be that New Zealand's comparatively low electricity prices (in international terms) make a SWERF plant uneconomic in Christchurch. A specific study would be required to determine the suitability to Canterbury's situation. The major markets for SWERF have been identified as Europe and the USA.
Q.
Why is Orion investing in electricity generation in an Australian based company when it hasn't invested in electricity generation in New Zealand? A.
Under the Bradford sponsored legislative split of line and energy in 1998/99 we have been prevented from owning any significant New Zealand electricity generation assets. However recent law changes now mean that we can invest in certain types of renewable electricity generation. Orion is open to such investments and will consider them on their merits.
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