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Macquarie advises on potential Origin spin-off

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LNG Industry,

According to Reuters, Origin Energy is considering a potential spin-off of its gas production business, and has hired Macquarie Capital as an advisor. The spin-off would include a $25 billion LNG plant.

Macquarie has argued that Origin should only proceed with a spin-off once its Australia Pacific LNG (APLNG) project reaches full production, which is scheduled to occur in 2017. Macquarie claims that once this project milestone has been met, guarantees to lenders will be satisfied, which will make the split easier to accomplish.

Reuters cited analysts as saying that there is a lack of synergy between Origin’s domestic power business and its oil and gas division. Therefore, a spin-off could help the company shift its debt onto the gas production business, easing the risk of rating cuts.

Reuters claims that Origin will aiming to raise a further AUS$800 million through asset sales by June 2017.

Edited from various sources by David Rowlands

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