A trio of powerful Japanese investors is seeking a buyer for their local water services business, Trility.
Morgan Stanley's utilities team has sent a teaser document to potentially interested parties, marketing the business as one of the country's biggest private operators of water, wastewater and irrigation networks in the country.
Trility operates a bunch of Australian wastewater and treatment plants, including things like the Adelaide Desalination Plant, mine-site water treatment operations for companies including Energy Resources of Australia and irrigation systems in South Australia and Victoria.
The business is expected to be pitched to the country's listed contractors and engineering firms such as Downer EDI and CIMIC, along with "core-plus" infrastructure investors who like getting their hands dirty operating businesses.
It'll be interesting to see who ends up bidding for the unit. Water and water services is a reasonably new investment class in Australia, with most of the country's water assets and operating companies in the hands of state governments.
While governments have been quick to privatise electricity networks, ports and the like, water assets are yet to hit the block.
Potential buyers were told Trility has about $120 million a year revenue and close to $20 million in annual earnings. While it's early to be putting a value on the business, one tyrekicker said it was probably worth up to $200 million.
Trility is owned by three Japanese investors; Mitsubishi Corporation, which has a 60 per cent stake, Innovation Network Corp (30 per cent) and JGC Corporation (10 per cent).
Interested parties expect to receive an information memorandum before the end of the year, with the auction to take place in early 2017. It's expected to be run as a traditional two-round sale process.
Elsewhere, all eyes are on Origin Energy's stake in the Kupe oil and gas field in New Zealand after one of its joint venture partners increased its stake on Wednesday.
Origin owns 50 per cent of the joint venture and it has a good gauge of what the market thinks it is worth after Genesis Energy bought a 15 per cent stake to take its share to 46 per cent.
While Kupe is spitting off cash and reserves are being increased, surely it would fit into the "non-core" category at Origin. And with a new chief executive and chairman at the helm at Origin, and a mountain of debt, analysts and investors would not be surprised to see the Kupe stake go.
