Powerco shareholders discuss ownership

The two shareholders of electricity and gas distributor Powerco are having talks about future ownership of the network.

Powerco said the shareholders had started preliminary discussions about a proposed sale of Sydney-based Prime Infrastructure's 42 per cent interest in Powerco.

Alternatively they were discussing a purchase by Prime of a further 8 percent interest in Powerco from the 58 percent of the New Zealand utility owned by funds associated with Queensland-based investment fund QIC.

Around 420,000 consumers are connected to Powerco's networks, with electricity operations in Tauranga, Thames, Coromandel, eastern and southern Waikato, Taranaki, Wanganui, Rangitikei, Manawatu and the Wairarapa. Its gas pipeline networks are in Taranaki, Hutt Valley, Porirua, Wellington, Horowhenua, Manawatu and Hawke's Bay.

The ownership talks arose as a result of a proposed merger between Prime and Brookfield Infrastructure Partners.

Under the terms of the Powerco shareholders' agreement, the consent of the QIC parties is needed for the Prime change of control resulting from the proposed merger.

The QIC parties have not approved the change of control, Powerco said.

Where consent was not given, the shareholders' agreement set out a process by which the QIC parties had an option to buy Prime's 42 per cent interest either at an agreed price, or in the absence of agreement, at fair market value to be determined by an independent expert.

- NZPA