Origin Energy may raise funds from markets for $35-bn LNG project

Australian energy company Origin Energy may go for more capital raisings to fund a $35-billion LNG project, even as it came out with a $2.3 billion offer to pay for New South Wales' (NSW) electricity acquisitions.
The market was expecting the energy retailer would tap investors for the acquisition of the electrcity assets. However, it is the company's massive LNG project with ConnocoPhillips - Australia Pacific LNG, or APLNG, that investors seem to be more interested in.
According to Karen Moses, Origin's executive director for finance and strategy APLNG had access to all kinds of funding options and since it was a company in its own right, it was more than capable of taking on project finance.
She added agencies would be interested and it would have partners from around the world so the banks were very interested. She said choices for Origin would depend on what provided the company with the most certainty at the lowest cost.
The comments came in the backdrop of company's announcement of a $2.3 billion raising, to be priced at $13, which would be 17 per cent discounted the last trade of $15.66.
Some analysts had not expected such a steep discount.
According to managing director Grant King, while he agreed $13 was a low price, it came with the terms of the raising.
He said he would have loved to have the share price at  $18 or $20 or some higher number. He added the company did not choose  $13, it was a consequence of the share price and the terms the company entered into in December, when it was clearly sensible that the company had underwriting arrangements in place to fund the acquisition.
According to Origin, the funds raised would go toward reducing the debt associated with the $3.26 billion purchase of electricity assets privatised by the NSW government.
With its acquisition of Integral Energy and Country Energy's retail businesses as also the Eraring GenTrader arrangements, the company it had emerged as Australia's largest electricity retailer.
Chairman Kevin McCann said the acquisition of the NSW energy assets was a milestone for Origin and was expected to be materially accretive to underlying earnings per share.
Reconfirming the current trading conditions as outined in its half-year results on 24February, Origin said it expected full-year underlying earnings to increase by around 35 per cent, as against previous financial year, while underlying profit is projected to rise by 15 per cent on the previous year.