Origin Energy has appointed Macquarie Capital to advise on a potential spin-off of Origin’s gas production businesses, including its $25 billion liquefied natural gas plant, two sources familiar with the matter said on Friday.
Australia’s largest energy retailer believes shareholders receive little benefit from owning an integrated business which includes a stake in debt-saddled Australia Pacific LNG, power plants and a power and gas retail business, one source said.
The spin-off would shift debt to the gas production business and help protect Origin’s investment-grade credit rating, which is currently one notch above junk, the source said.
Doesn’t say much for APLNG prospects. A vertically integrated Chinese buyer would make sense though that would not do much for Australian energy security and may be an issue. Perhaps Shell could snap it up and fully integrate with QCLNG. Whoever it is, they’ll need a mighty balance sheet.