Alliant to sell stake in TrustPower

United States energy company Alliant Energy said today it planned to sell its 23.77 per cent stake in Bay of Plenty's TrustPower and its 5.07 per cent stake in utilities investor and fellow TrustPower shareholder, Infratil.

The TrustPower stake is worth just over $500 million at today's price and the Infratil stake is worth around $46 million.

To sell the TrustPower stake to one party, Alliant would need to make an offer to all shareholders or obtain shareholder approval.

Alliant spokesman Scott Smith said the company was just beginning the sale process and was not sure how it would sell the stake.

Alliant and Infratil, which owns 35.01 per cent of TrustPower, had an agreement to work together with their stakes in TrustPower.

Infratil said it remained a committed long-term cornerstone investor and had been very comfortable working with both Alliant and TrustPower's other major shareholder, the Tauranga Energy Consumer Trust (28.56 per cent).

Infratil executive director Lloyd Morrison said because Infratil and the trust held over 63 per cent of TrustPower, takeover was not really an option.

Alliant bought its stake in 1999. TrustPower was in its books at US$106 million ($166m) so it stood to book a gain on the sale of close to $400m.

Mr Morrison said today's news was both predicable and disappointing.

Alliant had had "performance issues" like a lot of other US utilities, which were facing competition and regulatory issues, Mr Morrison said. It had sold assets in South America and China to cut debt.

Mr Morrison said most US utilities that had bought assets in New Zealand and Australia had sold them or were selling them because of problems on the home front.

California's Edison Mission for example, had sold its half stake in Contact Energy in 2004.

"Most of these people came across allegedly with a long-term commitment to their assets," Mr Morrison.

Infratil was accused of not having a long-term horizon, but had been in TrustPower since the float in 1994, while Australia Gas Light and Alliant had both proved not to be long-term holders.

Mr Morrison said the new owner would have to be content with a significant minority position or the sale would have to go to a range of institutional investors.

If it went to institutional investors, that would be positive because it would increase liquidity in the stock, he said.

TrustPower's shares initially fell 2 cents to $6.75 when the market opened, but then rose to $6.85, up 8c. The stock has traded between $5.20 and $7.71 in the last year.

Mr Morrison expects Alliant's Infratil stoke to be dispersed. It is the third largest in the company after Duncan Saville's 19.9 per cent and the staff stake of 8 per cent.

Mr Smith denied Alliant was selling because of problems on the home front.

"An international presence is no longer consistent with our long-term business strategy," he said. "We have native generation requirements for our US customers that we are looking to make investments in."

Alliant had sold holdings in Brazil and China and was in the process of selling assets in a resort area in Mexico.

Mr Smith said no target date had been set for completion.

First NZ Capital had been mandated to conduct the sale.

- NZPA