APA Group (APA) said it has established its unlisted investment vehicle called Energy Infrastructure Investments Pty Limited. The company said that funds released from this transaction would result in a reduction of debt by $647 million.
The transaction involved selling annuity-style assets into Energy Infrastructure Investments for a sum of $647 million.
The company said it would use the funds to reduce debt and gearing to a level of 69%.
APA said Energy Infrastructure Investments had attracted Marubeni Corporation and Osaka Gas, both strong investors with international industry experience.
APA said it continued to benefit from the assets through its 19.9% equity participation in Energy Infrastructure Investments and as provider of comprehensive commercial and operating services under a long term agreement.
Managing director Mick McCormack said with the completion of this transaction, APA had delivered on key strategic objectives outlined six months ago.
"As a result, we have a stronger balance sheet and are better positioned to develop the opportunities on our core gas infrastructure assets," Mr McCormack said.
The value achieved for the assets was in line with APA's combined estimated book value of the existing assets and those under construction once completed.
Mr McCormack said these assets had either been recently acquired or developed, and achieving book value, particularly in the current turbulent market, was a highly satisfactory outcome for APA.
"Additionally, we are pleased to have as investors in this vehicle, Marubeni Corporation and Osaka Gas, and look forward to working closely with them," Mr McCormack added.
The assets transferred included gas power generation and coal seam gas processing plants as well as the pipelines and electricity interconnectors.
The company the enterprise value of Energy Infrastructure Investments was $703 million, with equity contribution of $165 million and new five year, non-recourse project debt of $538 million.
At 1032 AEDT, shares in APA Group were up 19c or 7.5% to $2.72.
