SYDNEY, May 30 (Reuters) - Australia’s New South Wales aims to raise $3 billion by selling three power generation firms and use the proceeds to build roads, schools and hospitals among other projects, the state’s premier said on Wednesday.
NSW as the eastern state home to the city of Sydney is known, expects to get state legislative approval for the sales after the ruling Liberal Party won support from a smaller party for a privatization bill languishing since March.
“The sale is expected to generate gross proceeds of around A$3 billion, which will go toward critical road, school and hospital projects across NSW, with at least a third directed towards regional areas,” NSW Premier Barry O‘Farrell said in a statement.
NSW has already called on banks to pitch for the sale advisory role next week, investment bankers said, in a deal that would represent more than 10,000 megawatts of generating capacity, spanning state-owned Eraring Energy and Delta Electricity and Macquarie Generation.
The sale is expected to draw interest from the main players in the market such Origin Energy, AGL Energy and CLP Holdings’ TRUenergy, as well as other Asian bidders.
NSW raised more than A$5 billion by selling its retail power business and power trading rights in late 2010, and earlier this month signed a deal to sell its Sydney desalination plant for more than A$2.3 billion.
TRUenergy and New Zealand’s state-run Mighty River Power Co are gearing up for initial public offerings later this year.
$1 = 1.0135 Australian dollars Reporting by Narayanan Somasundaram and Sharon Klyne; Editing by Ed Lane