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Offer for ENE UK/French Landfill Gas Power Generation Interests

22 Jun 2009

Energy Developments Limited (ASX: ENE or the “Company”) advises that it has received a detailed, credit approved offer from an international infrastructure specialist fund manager to acquire its UK and French landfill gas (LFG) power generation interests on a debt free / cash free basis for a headline price of £135 million (A$280 million) subject to usual sale contract adjustments (the “UK/France Offer”).

ENE had previously held extensive discussions with this party as part of the Strategic Review process announced in July 2008. Discussions were terminated by ENE in March 2009, principally on the grounds of uncertainty over the timing and status of the requisite financing for the proposed acquisition.

The UK/France Offer is now supported by credit approved financing from a small group of banks, although it is subject to a number of key conditions, including: confirmatory due diligence, documentation (including the satisfaction of conditions precedents), and investment committee approval. While negotiations with the respective party are at an advanced stage, ENE cautions that, at this point, there can be no certainty that the UK/France Offer will lead to a firm offer capable of acceptance.

The UK/France Offer involves the potential sale of the following interests held by ENE (the “UK/French Assets”):
• wholly owned UK LFG assets, comprising 57MW of power generation projects across ten sites;

• 50% interest in the Gastec Packington Joint Venture which owns and operates a 9MW LFG project at Packington in the UK; and

• 50% interest in the Gastec Joint Venture which owns and operates 29MW of generation across 20 LFG projects in France.

The UK/France Offer would, if completed, involve the disposal of approximately 75MW of power generation capacity (on an equity interest basis), which is approximately 13% of the Company’s total worldwide installed power generation capacity of approximately 600 MW. ENE also owns and operates a 200 tonne per day LNG Plant and associated transport and LNG storage facilities as part of the West Kimberley Power Project.

The UK/French Assets contributed EBITDA of approximately A$13 million for the six months to 31 December 2008.

Should the transaction proceed, the net proceeds of sale, including after the repayment of external net debt (~£56 million at 31 December 2008) and other costs would be approximately £74 million (A$150 million or $1.00 per share).

A committee of independent non-executive directors (the “Committee”) is currently considering the UK/France Offer.

The Committee also continues to evaluate the non-binding, conditional and incomplete proposal from Archer Capital for 100% of ENE, as previously advised to the market, and discussions have commenced between the parties.

For additional information contact:
Greg Pritchard, Managing Director on +61 7 3275 5650
John Frey, Cosway Australia on +61 411 361 361
ENE is an international provider of renewable energy and low greenhouse gas emission energy. The Company currently owns and operates a diversified international portfolio of power stations in Australia, the United States, Europe and the United Kingdom with a total capacity of approximately 600 MW from a range of fuel sources including landfill gas, coal mine methane and natural gas and liquefied natural gas.

In the year ended 30 June 2008, in its worldwide operations, the Company produced approximately 2,100 GWh of clean energy, and captured and utilised greenhouse gases estimated at 8.8 million tonnes of carbon dioxide equivalent, akin to removing 2.8 million cars from the road. In Australia, the Company captured and utilised waste methane to produce approximately 1,100 GWh of clean energy, and abated approximately 4.5 million tonnes of carbon dioxide equivalent, comparable to removing approximately 1.3 million cars from the roads.
ASX Release

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