A consortium of former Alinta senior executives is drawing up plans to acquire the WA utility from Babcock & Brown Power Ltd., (BBP) as soon as controversial gas arbitration with the North West Shelf Venture is settled. Any bid for the utility is likely to be worth $300 million - $500 million, depending on whether four co-generation power plants at Alcoa’s Pinjarra and Wagerup alumina refineries are included. It is also seen as a last moment effort to prevent Alinta’s collapse and therefore expected to receive the approval of Premier Colin Barnett, who has already said his Government would not help BBP. The group said they are confident of gaining enough support from anonymous private as well as financial investors to finance the acquisition and oversee the “rebirth” of the businesses, although they accepted that BBP’s lenders are potential deal breakers. a stand-alone valuation of Alinta is relatively easy to determine, buy any bidder would also have to agree with BBP and a banking syndicate on how much of BBP’s first-ranking $2.6 billion worth of debt needs to be absorbed. Alinta’s ex-group manager of acquisitions and strategy Rod Evans, group manager investor relations Shaun Duffy and group manager treasury David De Loub have remained tight-lipped on details of their offer, code-named Lazarus, and who they would install to run the utility if they were successful. The Lazarus trio’s spokesman, Mr. Duffy, said a valuation for Alinta would depend on the outcome of arbitration between BBP and NWSV over gas supply contracts. Michael McHugh, the retired High Court judge who served as independent arbitrator, handed down his price determination, but neither side has revealed Mr. McHugh’s determination but sources said the outcome was potentially ruinous for Alinta. It is likely Alinta may have to pay at least twice as much for the gas compared to the old regime, further eroding its profit margins and ability to service the BBP debt load. BBP said on November 12, it expected to announce an outcome by November 19. Mr. Duffy’s group is only interested in Alinta’s WA gas retail arm (and potentially the Alcoa plants). A major impediment is going to be the BBP banks’ willingness to carve up the portfolio for prospective buyers, and how it will distribute the debt.

Babcock and Brown Power Limited filed its Annual on September 30, 2009 for the period ending June 30, 2009. In this report its auditor, PricewaterhouseCoopers LLP, gave an unqualified opinion expressing doubt that the company can continue as a going concern.

Babcock and Brown Power Limited reported company earnings results for the year ended June 30, 2009. For the year, the company reported loss attributable to stapled security holders of AUD 1,733,079,000 on revenue of AUD 727,000 against profit attributable to stapled security holders of AUD 427,838,000 on revenue of AUD 1,135,000 for the same period of last year. Loss before income tax was AUD 1,676,854,000 against profit of AUD 366,483,000 in the same period of last year. Net cash outflow from operating activities was AUD 18,542,000 against AUD 21,822,000 in the same period of last year.