Energy company ERM Power (ASX:ERM) has arranged to acquire a controlling stake in a Queensland power station for $61.7 million.
The company will acquire a 50% stake in the 332 megawatt Oakey power station from Redbank Energy, taking its total interest to 62.5%.
Oakey is located 150km west of Brisbane in a high-demand region and in close proximity to fuel supplies, ERM Power said. ERM Power was involved in the development of the power station, which had been commissioned in 1999.
But the plant has operated for less than 5% of the time during the intervening years, so is in near-new condition, ERM Power CEO Philip St Baker said.
The deal is expected to contribute an extra $6.3 million to forecast FY12 net profit, increasing underlying earnings per share by 0.6 cents from the previously expected 15.7 cents, he said.
The transaction will be funded through existing cash plus a $15.6 million corporate debt facility.
ERM Power closed an IPO and started public trading in December last year. Since listing at over $1.800, the shares have trended downward in value most months. But EPW shares grew 2.22% in Monday's trading to $1.615.