Hutt Mana trust sells its stake in NGC

Hutt Mana Energy Trust says it has sold its 6.65 per cent stake in gas network company NGC.

It sold the 51.5 million shares at $1.58 each, compared with the $1.69 price the stock closed at on Monday.

NGC shares fell 5c to $1.64 on market yesterday.

Trust chairman David Ogden said he was pleased with the share price.

Last year the trust had the shares in its books at just over $1 a share. In March, it sold 15.5 million shares for $1.40 a share.

Hutt Mana has been a shareholder in NGC since the company bought power generator and retailer TransAlta New Zealand in 2000. NGC was nearly brought to its knees in 2001 because of that purchase and the subsequent winter power crisis that exposed its lack of hedging.

However, NGC has since been on a recovery track and its shares late last month hit a 2 1/2-year high.

The trust decided late last year to sell its NGC shares, after consultation with its beneficiaries. It reduced its stake by 2 per cent in March.

Ogden said the trust would say this week what it would do with its $160 million of cash assets.

A legal challenge to a distribution of the trust's assets to the 84,000 beneficiaries in the Hutt, Porirua, Tawa and Johnsonville was flagged in June. Each trust beneficiary stands to receive about $1900.

A local group called Build the Future said then that under the trust deed electricity customers in the district were entitled only to earnings (or income) from the trust each year, but the beneficiaries of the fund itself are the "communities within the district".

If the trustees decided to give all the money to customers, there would be a legal challenge.

Ogden said the trust had advice Build the Future's views were incorrect. The trust deed said that if a decision were made to wind up the trust it would have to wait a year before distributing the capital to customers.

- NZPA