G+T advised leading Australian energy infrastructure business, ASX-listed APA Group, on all aspects of its $773 million acquisition of Basslink Pty Ltd (Basslink), including APA’s acquisition of 100% of the secured bank debt which had a face value of approximately $526 million in late 2021 and early 2022, and the entry into revised network services and operational arrangements with Hydro Tasmania and the State of Tasmania respectively, to facilitate the operations of the interconnector and also provide APA with a pathway to convert Basslink to a regulated asset.
Basslink owns and operates a 370km high voltage direct current electricity interconnector between Victoria and Tasmania. In November 2021, Basslink’s Singaporean owner, Keppel Infrastructure Trust, placed the business into administration and the senior secured lenders at the time appointed receivers and managers to Basslink and its related entities who have had day to day control of Basslink’s operations since.
G+T assisted APA in its strategy to secure this unique piece of critical infrastructure, with APA confirming its interest in acquiring Basslink through its acquisition of the secured debt. This involved APA participating in the receiver-led competitive process for the sale, restructure or recapitalisation of the business, which concluded with APA being selected preferred bidder.
The complex transaction then involved APA entering into binding documentation with the receivers which led to APA acquiring the shares in Basslink from the Cayman Islands-based holding company (to which the receivers were also appointed) and entering into a Deed of Company Arrangement with the Ernst & Young administrators in relation to Basslink (the DOCA). The DOCA provided the platform for Basslink to exit external administration and continue trading, unsecured trade creditors to be paid in full and the ongoing employment of Basslink’s staff. The creditors of Basslink voted in favour of the Deed of Company Arrangement at the second creditors’ meeting convened by the administrators of the entities on 18 October 2022.
As part of the transaction, complex contractual arrangements were negotiated and agreed with secured parties Hydro Tasmania and the State of Tasmania to facilitate the operations of the interconnector and provide a pathway to regulating the asset, as well as address historical matters and litigation relating to Basslink.
The G+T team was jointly led by co-head of M&A and Corporate Advisory Partner, Costas Condoleon and Head of Restructuring + Insolvency Partner, Peter Bowden, and Head of Energy + Infrastructure Partner, Alexander Danne. Costas and Peter were supported by lawyers Wes Bainbridge and Megan Lowe and drew upon the support of lawyers Becci Cartoon, Nikita Goodwill and Peter Hession from the Restructuring + Insolvency team at various pressure points in the complex transaction. Alex advised on the complex negotiations with the State parties with support from energy regulatory Special Counsel Geoff Petersen, and lawyers Kestin Brown and Chi Han Yeo. Drawing on expertise from the wider Banking + Projects team and the G+T firm more generally, Banking Partner David Kirkland advised on debt financing aspects of the transaction with support from lawyer Mark Nichol, and the team was supported by various other lawyers across the firm throughout the transaction lifecycle.
Costas commented “In a true team effort working closely with APA and its outstanding senior legal counsel, we are pleased to have successfully advised APA on this milestone transaction. This is an excellent example of G+T’s ability to provide a full-service offering and collaborate seamlessly across several practice groups to deliver a desirable outcome to our client.”
Peter added “It was a pleasure to advise APA Group on this significant acquisition of Basslink and be able to support APA throughout the multiple phases of the transaction. Under extremely complex circumstances and accelerated timeframes, our leading Restructuring + Insolvency group drew on the expertise of wide G+T to team navigate APA through the acquisition process. In the midst of a challenging economic landscape, I am delighted that we were able to deliver a successful outcome in the administration of Basslink and for the creditors and other stakeholders, creating much needed operational suitability for Basslink, whilst bolstering APA’s infrastructure portfolio.”
Alex commented “G+T’s Energy + Infrastructure group continues to advise on the leading energy transactions and projects in the market. We wish our client APA continued success as they continue to diversify and build upon their impressive energy infrastructure portfolio by adding a third electricity interconnector to their remit.”
FTI Consulting were running the sale process with advisers Houlihan Lokey and King & Wood Mallesons.
Gilbert + Tobin’s Corporate Advisory team, which boasts some of Australia’s leading M&A and Private Equity lawyers, has advised on many of Australia’s largest and most innovative transactions. The team is recognised in the leading legal directories, including being recognised as Band 1 for Corporate/M&A by Chambers Asia-Pacific 2022 and Tier 1 for M&A by IFLR1000 2021.
Gilbert + Tobin’s Restructuring + Insolvency team is recognised by all major legal directories. Gilbert + Tobin was awarded Restructuring & Insolvency Law Firm of the Year (Australia) 2021 and 2020 by Global Law Experts and won Insolvency & Restructuring Deal of the Year at the 2022 Australasian Law Awards.