SPARK Infrastructure has acquired a 14.1 per cent stake in gas pipeline company Duet Group, raising $200 million through a placement to part fund the acquisition.
Duet Group wholly owns Multinet Gas Group Holdings and DBP Development Group, as well as an 80% stake in the Dampier to Bunbury Pipeline.
Spark managing director Rick Francis said the acquisition, at an average entry price of $2.16 per stapled security, would benefit cash f low and create options for future value extraction.
The stake was acquired through derivative contracts with Deutsche Bank, Spark said, adding that it had corporate bank facilities of $275 million available when required.
The 14.1% stake will also include an effective entitlement to an expected distribution of 8.5 cents per security in June, Spark said.
Despite the stake acquisition, Spark said it did not plan to make a takeover bid for the Duet Group under current circumstances.
The company added that it did not need additional equity to fund capital expenditure in its existing asset companies (SA Power Networks and Victoria Power Networks) during their current regulatory periods which end in 2015.
Instead, proceeds from the equity issuance would be used to prepay a portion of the forward price payable under the forward contracts and meet certain transaction fees and expenses.