King & Wood Mallesons

Asia-Pacific 100 position: 3

Australia: open for business, and changes to look out for in 2014

In a further positive sign for foreign investment following the recent Yancoal decision, on Friday the treasurer announced his conditional approval of a $7.5bn foreign investment application from State Grid Corporation of China to acquire a 19.9 per cent holding in SP AusNet and a 60 per cent holding in SPI (Australia) Assets Pty and SPI (Australia) Trust (trading as Jemena).

SP AusNet is a dual Australian Securities Exchange- and Singapore Exchange-listed energy infrastructure entity that owns and operates electricity transmission networks, electricity distribution networks and gas distribution networks in Victoria. Jemena is a private company that owns and operates electricity, gas and water assets in eastern Australia. State Grid is a Chinese state-owned enterprise and is the world’s largest electricity utility. The State Grid proposal ultimately involved the transfer of the interests from one state-owned enterprise to another.

The treasurer approved the application on the condition that at least 50 per cent of the members to be appointed by State Grid to the boards of SP AusNet and Jemena are Australian citizens who are ordinarily resident in Australia. The nationality-based condition imposed by treasurer Hockey is not unusual. Previous treasurers have imposed similar conditions on foreign investment applications both government and private based…

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