July date for Vector decision

By CHRIS DANIELS energy writer

Vector's capital bond-holders, who have waited eight months to hear the future of partial privatisation and stock exchange listing plans, should have a decision by the end of July.

Vector, which is New Zealand's largest power lines company, has yet to tell its capital bond-holders whether it still plans to float 24.9 per cent of the company this year.

Vector is owned by its customers through the elected Auckland Energy Consumer Trust. The next election for trustees is scheduled for October.

Anyone who bought bonds in the $307 million issue last September was told that Vector's board was "working towards" partial privatisation and listing.

They were also given the right to invest in any future float, with every dollar of capital notes giving the bond-holder the right to get 50c worth of Vector shares at a 2.5 per cent discount to the offer price.

If the float does not happen before September 30, then the interest rate on the bonds increases from 8.25 per cent to 9.75 per cent.

But the day the bonds issue was announced, chairman Michael Stiassny said no commitment had been made to an initial public offering or listing.

Stiassny told the Business Herald that the Vector directors had discussed the issue at yesterday's monthly board meeting, and "intended to finalise a position with the trust in the next two months".

The Business Herald understands the float plan is dead, despite the board giving itself another two months to debate the topic.

Any board decision on a float and listing would have to be endorsed by the trust, which had three of its five members elected in 2000 on strong anti-privatisation platforms.

Bond-holders will continue to hold preference rights in any float, whether it happens before the September 30 deadline or not.