Contact Energy's majority shareholder, Origin Energy, says its investment in the local power company "continues to form a key part of our Australasian energy markets business" amid speculation among New Zealand investors that this month's 50 cents-per-share special dividend signals potential exit from the stake Origin has built up since 2003.
Contact fell 8.4 percent to $5.57 yesterday as the shares went ex dividend ahead of the $367 million June 23 payout, which will largely exhaust available imputation credits in the company's accounts. The payment has fuelled speculation about Origin's intentions since presentations last month in which the debt-burdened operator's managing director, Grant King, signalled Origin was looking to divest assets to improve its balance sheet flexibility.
In cautiously worded commentary published yesterday, Craig Stent at Wellington funds manager Harbour Asset Management said the special dividend move has been read by "some investors" as meaning "the shareholding structure of the company may be up for review."
"At a stretch, that could mean that majority shareholder Origin is readying the business for sale," Stent wrote. "Most likely it could just mean a financially prudent move (by) the management team. However, in a recent presentation to investors in Sydney, Origin's CEO highlighted that with a sustained period of low oil prices, the company had less balance sheet flexibility" and "placed on the table various actions, including divesting assets."
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