insto - Australian financial markets

While many companies are reluctant to admit their potential greenhouse gas costs, the number of institutional investors seeking this information has spiked, repots Bernard Kellerman.

The Carbon Disclosure Project has evolved as the pre-eminent mechanism for communication between companies and investors on climate change and carbon exposure issues. It has been run globally for 7 years, but for the fourth year has been expanded to cover the top 200 Australian and top 50 New Zealand companies.

ASX100 companies ranked fifth globally for their disclosure on emissions and climate change strategy, according to the results of the Carbon Disclosure Project 2009 Australia and New Zealand. Seventy-three per cent of ASX100 and 96 per cent of ASX50 companies responded to this year’s CDP survey, compared to an overall global response rate of 55 per cent.

The focus on public sector infrastructure asset financing continues apace, with the NSW government announcing the sale of the retail operations of Energy Australia, Country Energy and Integral Energy; the long-term lease of the generation trading rights of Macquarie Generation, Delta Electricity and Eraring Energy; as well as the sale of seven power station development sites.

The transaction structure consists of a phased trade sale with an option for an initial public offering of a business combining Integral Energy's retail business, the long-term lease of Eraring Energy's generation trading rights, and a development site at Bamarang. Trade sale bidders will have the option to provide binding offers for individual assets or a combination. The government expects to complete the restructure by end-June 2010.

Fitch Ratings analysts doubted whether investor appetite will be as strong as for previous privatisations in other Australian states. In addition, the availability of credit finance is weaker than in 2007 when Queensland divested its energy retail businesses - the last similar transaction in Australia.