Australian Power & Gas acquires more customers

Melbourne, Australia — (METERING.COM) — August 7, 2007 – Australian Power & Gas Company Limited, which holds a full suite of gas and electricity retail licences in Victoria, New South Wales and Queensland and has been approved to operate by NEMMCO, the National Electricity Market Management Company, has acquired an additional 15,000 Victorian residential customers from a distressed sale. This brings the total customer account base to approximately 45,000 since commencement of sales in February 2007.

CEO James Myatt said: “This transaction is the result of an urgent sale and the price paid is at a significant discount to the normal market. We see this as excellent value, and well under the $1000 plus paid for customers in recent industry transactions. It is also less than what we would normally expect to pay through our sales acquisition channels.”

The acquisition enabled the vendor to avoid the customers being transferred back to the Retailer of Last Resort. Usually under these conditions customers are transferred back to incumbent retailers.

“These customers are very attractive to Australian Power & Gas and will be profitable based on our wholesale supply agreement in Victoria. For the customers, this transaction ensures they will be handled consistently and ensures that they will receive the opportunity to obtain ongoing discounts that otherwise may not have occurred under Retailer of Last Resort obligations,” Myatt said.

The acquisition ensures Australian Power & Gas has sufficient scale to be EBITDA positive month-on-month when the 45,000 accounts are fully active and excluding the costs of the ongoing new customer acquisition program. The acquisition continues to build the presence of Australian Power & Gas in the profitable Victorian energy market. The customers acquired are currently on a compatible back office system and can be easily integrated onto its billing and customer service systems.

Myatt said: “We will be working closely with regulators, market participants and existing management to ensure that customers are protected throughout this process and enjoy the benefits of the simply smarter energy products from the team at Australian Power & Gas. Our management team has been involved in many of the historic mergers and acquisitions within the Australian energy market and this experience will assist in a smooth and well-executed outcome.”