Hastings Funds Management Ltd, as responsible entity for the managed investment schemes comprising the Hastings Diversified Utilities Fund (HDF), today announced the execution of a binding agreement to sell its interests in South East Water (SEW) to global asset manager CDPQ.

Transaction proceeds, inclusive of foreign exchange hedging, are approximately A$206 million, Hastings said in a statement on Friday.

These represent approximately 40 cents per stapled security - a significant premium to the most recent average broker valuation of HDF's interest in SEW.

According to Hastings, "receipt of the net sale proceeds will significantly improve HDF's financial flexibility to focus on, and deploy capital into, Epic Energy and its adjacencies in the energy infrastructure sector."

HDF chief operating officer Colin Atkin said, "The divestment of South East Water demonstrates our commitment to follow the strategic path announced earlier this year.

"The key findings of the strategic review were that the market value attributed to HDF was less than its intrinsic value, and that HDF would focus on energy infrastructure to capitalise on the long term growth profile of the sector."

"The sale of HDF's interests in SEW to CDPQ is consistent with the focus of the Fund. The price we achieved is testament to the discipline applied to achieve the best outcome for all security holders with the realisation of proceeds equivalent to 40 cents per security from the sale," Mr. Atkin said.

The transaction is expected to achieve financial close by December 20, 2010.