Powerco waits for NGC nod

WELLINGTON - Listed energy firm Powerco is waiting for its new Australian controlling shareholder to signal if potential merger talks with NGC Holdings should resume.

The talks on "business opportunities" that might have led to a merger were put on hold in May when Powerco's three big shareholders said they were selling their combined 53.6 per cent stake.

Prime Infrastructure of Australia said on Monday that it had "a lock-in agreement" to buy the shareholding.

It would make a $2.15-a-share takeover offer to minority shareholders in the next six weeks.

Powerco chairman Barry Upson said yesterday that Prime effectively had a majority shareholding and could signal its intentions towards NGC now.

"It would certainly be good to start that off again, but that is going to be dependent on the new majority shareholder."

Prime chief executive Chris Chapman said it was "far too early" to comment on the stalled discussions with NGC.

Meanwhile, Upson yesterday warned that any move by the Government to block the sale to Prime would result in a foreign investor backlash.

Finance Minister Michael Cullen warned that he had yet to approve the $364.7 million takeover because of "sensitive lands" owned by Powerco.

Upson said if Cullen blocked the deal, it could lead to a "real problem" in attracting other foreign investors.

"Just about every major company in the country has land which could be described as sensitive. This is politics at its worst."

The land in question - which Cullen did not identify in Parliament yesterday - was sensitive to treaty rights.

"We've got four pieces of land - little bits of dirt, quite frankly - that are used for substation transformers," Upson said.

"One is in Tauranga. There is another right next door to Moutoa Gardens in Wanganui."

Cullen was responding to concerns from New Zealand First leader Winston Peters that an important infrastructural asset was going into overseas ownership when New Zealand was facing the prospect of energy shortages.

The deal has yet to gain approval from the Overseas Investment Commission.

- NZPA