Infratil to sell small holding in new lines firm

By FIONA ROTHERHAM

Infrastructure investor Infratil intends to sell its 5 per cent stake in Powerco before the newly merged central North Island lines company is listed.

Taranaki's Powerco and Centralpower of Manawatu announced last month a long-awaited merger in a $106 million deal.

The new company, Powerco Ltd, will list on the stock exchange within three months of its formation, likely to be in early September.

Infratil said it would be left with a 5 per cent stake in the merged company. It estimated the stake had a market value of around $17.5 million.

Under the Electricity Reform Act splitting power distribution and generation/retail, Infratil could hold up to 10 per cent of the lines company.

"A policy decision was made [that] if we can only hold 10 per cent in Powerco, it might as well be nought," said Infratil spokesman Paul Ridley-Smith.

Infratil recently sold its remaining 5 per cent in Centralpower to Powerco for $11.5 million.

In its annual report, Infratil said the earlier sale of a 16 per cent interest in Centralpower was at a "satisfactory" price, with shares that had cost $23.2 million realising a net $45.3 million.

Powerco chief executive Steven Boulton said shareholder meetings of both companies to approve the merger had been delayed for a couple of weeks because of holdups with the documentation. They will now be held in mid-August.

A 75 per cent majority is required to approve the merger.

The deal will see the New Plymouth District Council holding 47 per cent of the shares in what will become the country's fourth largest energy network company, with more than 175,000 customers.

The council is using interest-bearing bonds and a small number of shares to buy out the Palmerston North City Council's 41 per cent stake in Centralpower.