UPDATE: Alinta Has Received Indicative Takeover Bids -Source

Debt laden Australian power generator Alinta Energy Group (AEJ.AU) has received indicative takeover bids from a number of sources, a person familiar with the situation said Wednesday.

Any buyer of the owner of 12 operational power stations would have to take on about A$3 billion in debt, with the company currently trading at a market value of around A$40 million after its securities were hammered in the wake of the global financial crisis.

"Some indicative bids have been received as part of the (deleveraging review) process but it's not at final bid stage yet," the person said.

The former satellite fund of failed investment house Babcock & Brown Ltd. said in April it had hired Lazard to examine ways to reduce its heavy debt load, including potential asset sales and capital management opportunities.

An unsourced report on The Australian newspaper's website said Wednesday that a consortium comprising Origin Energy Ltd. (ORG.AU), APA Group (APA.AU) and Japan's Marubeni Corp. (MARUY) has emerged as a key bidder for Alinta.

Other media reports have cited French energy giant GDF Suez (GSZ.FR) and diversified miner BHP Billiton Ltd. (BHP.AU) as possible rival bidders.

Spokespeople for Origin, APA and BHP all declined to comment on the reports.

Credit Suisse Analyst Sandra McCullagh said Tuesday that while Origin, with a healthy balance sheet, is well placed to buy power stations from Alinta, it may overlook them for more accretive opportunities, including the looming privatization of energy retailers in New South Wales state.

Origin already has an offtake agreement for Alinta's Braemer power station in Queensland state, so owning the asset may not be a priority, McCullagh said.

She added that the natural owner of Alinta's Western Australia state generators would probably want to have its own gas supply to hedge against gas price risk and Origin's Perth Basin gas production is insufficient to cover the Alinta load.

According to Alinta's interim accounts lodged February, the company at Dec. 31 had total current and non-current assets, including intangibles, of A$5.15 billion and total liabilities of A$4.43 billion, including A$3.26 billion of current and non-current borrowings.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com

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