Hong Kong-headquartered Beijing Energy International Australia (BJEI Australia) has entered into a scheme implementation agreement with TPC to acquire all shares in the Sydney-headquartered energy retailer in a deal valued at up to $180 million (USD 116.8 million).
TPC, through its retailer CovAU, supplies electricity and gas to an established customer base of residential, commercial and industrial contracts spread across Australia’s east coast.
BJEI Australia Chairman Warwick Smith said the proposed acquisition would further strengthen and diversify the Chinese company’s position in the Australian renewable energy market where it plans to build a 3 GW portfolio of clean energy assets by 2025 and 6 GW by 2030.
“Acquiring a well-established energy retail business is part of our longer-term strategy to diversify and de-risk the revenue portion of the business and we look forward to continuing to deliver value to TPC’s customer’s and the wider market,” he said.
“Integrating TPC’s existing customers with BJEI Australia’s green energy resources will help to deliver renewable energy to more consumers across Australia.”
The proposed acquisition of the TPC retail business follows BJEI’s announcement in December that it had, pending regulatory approval, acquired a portfolio of five utility scale PV projects in Australia with a combined capacity of more than 1 GW from developer Lightsource bp.
The portfolio includes the Wellington, West Wyalong and Woolooga projects which are already in operation, and the Wellington North and Wunghnu solar projects which are due to be operational in the second half of 2024.
Smith said at the time that the deal took the company’s Australian portfolio to more than 2 GW in planned, under construction and operational projects.
Image: Wollar Solar
While the acquisition of TPC, to be undertaken by BJEI’s 100% owned subsidiary Wollar Solar Holding, remains subject to regulatory and TPC shareholder approval, TPC Chairman Greg McCann said the board has “unanimously concluded that the Scheme is in the best interests of the company’s shareholders.”
Under the terms of the scheme, TPC shareholders are set to receive a financial package that includes an initial cash consideration of $8.77 per share, which values the equity of TPC at approximately $100 million. Additionally, shareholders will be entitled to a special permitted distribution dividend of up to $2.64 per share and a potential earn-out consideration of up to $4.41 per share.
TPC, which estimates that the permitted distribution could total up to $30 million while the earn-out consideration will be capped at $50 million in total, said they will only be disbursed if TPC meets specific performance milestones over the next three years.
Smith said the proposed acquisition is another step in BJEI’s aim to build a renewable energy business that “has the potential to be taken to the Australian Securities Exchange so that the Australian public can share in the long-term success of the company moving forward.”
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