The General Electric (GE) Energy Financial Services has sold 49.9 percent of its stake in Worsley Multi-Fuel Cogeneration (Worsley Cogen) power plant to Whitehelm Capital.

Known as Worsley Cogen, the power plant has an ongoing power-supply contract with leading alumina refinery, Worsley Alumina of BHP Billiton. The 25-year “take or pay” contract with Worsley Alumina has the tariff pegged to inflation. The dual unit multi-fuel cogeneration plant has a capacity of 550 tons per hour (tph) of steam and 104MW of electricity.

Worsley Cogen has been valued at AU$1.2 billion. Post-sale, GE will retain 50.1 percent stake in the business. It was commissioned in January 2014 in Collie, reports Financial Standard.

Tremendous potential

“While many managers have been focusing on highly competitive trophy asset processes, the successful investment in the Worsley Cogen demonstrates that there is a pipeline of exclusive, quality, mid-cap regional infrastructure assets underpinned by long-term contractual arrangements and solid fundamentals,” said Whitehelm chief investment officer Graham Matthews.

He said the investment decision in Worsley Cogen was taken after carefully assessing the facility's strong operating performance, future returns and attractive acquisition multiples. Whitehelm is currently managing AU$4.5 billion in funds and is advising on AU$15 billion of funds.

Whitehelm Capital is also eyeing more mid-cap infrastructure assets in Australia and overseas. According to Executive Director Tom Snow, the mid-cap space in Australia is largely ignored by many investors as they are chasing larger assets as seen in the case of NSW transmission network's TransGrid, acequired by Hastings Funds Management for AU$10.3 billion.

“Where we're seeing the market is less competitive is in the mid-cap space. You're not seeing the 25 to 27 times multiples of forecast earnings that you're seeing in the big trophy players,” Snow said.

Snow hinted that Whitehelm will be targeting more hydro-electric investments in Asia as well. It recently clinched a AU$50 million wind-farm deal in Denmark. Though Australia has "reasonable deal flow" Whitehelm sees more opportunities in Europe.

“Australia is good in the mid-tier space but in Europe there is a very strong pipeline of opportunities,” he said.

GE business

Regarding GE Energy Financial Services, ot mainly operates in the private equity and venture capital space. The focus is more on investments in growth capital, bridge financing, acquisition, buyout, and recapitalization. Majority of its deals are in mid venture, late stage, emerging growth, and mature transactions. There are also ancillary services such as project debt transaction, asset backed revolvers, and leveraged leases, reports Bloomberg.

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