Powerco's 'jumbo' reaches its target

By CHRIS DANIELS

Powerco has raised the $102 million it sought from institutions as part of a "jumbo" offer announced this week, at $1.60 a share.

Powerco shares last traded on Monday, before a trading halt, at $1.81.

The company's offer, open in separate parts to institutions and retail investors, entitles holders to one new Powerco share for every 2.37 shares held today.

The remaining $48 million of the offer, which opens on November 5 and closes on November 29, will be taken up by the retail sector, with the same entitlement ratio as for institutions, also at $1.60 a share.

This price is towards the lower end of the $1.50 to $1.80 range predicted by Macquarie Equities, which is organising the equity raising.

Powerco expects to issue a total of 93.75 million shares.

An investment statement and prospectus will be mailed to Powerco shareholders on November 4.

The "jumbo placement" - a combination of a rights issue and a share placement - is New Zealand's first.

Properly described as a priority entitlement offer, the method gained the "jumbo" nickname in Australia because it allowed listed companies to make large placements of shares to institutional investors.

The new shares will not confer any entitlement to the interim dividend of 6c a share to be paid on November 25.

The first payment of dividends on the new shares is expected to be made in June.

Powerco will use the proceeds to buy UnitedNetworks' electricity network business and assets in Tauranga, eastern and southern Waikato, Thames and Coromandel, for which it is paying $785 million.

The company also proposes to pay $220 million for UnitedNetworks' gas network business and assets in Wellington, Manawatu, Horowhenua and Hawkes Bay.

The rights are non-renounceable, meaning if a shareholder decides not to take them up, they cannot be sold to anyone else.

* The takeover of UnitedNetworks by neighbouring Auckland lines company Vector is now all but complete after the announcement yesterday that three local councils will sell their stake in the company.

The North Shore City, Waitakere City and Rodney District Councils will sell their 10.7 per cent stake in UnitedNetworks for $160.38 million.



Vector, which already has more than 80 per cent of UnitedNetworks' shares, will now own more than 90 per cent, allowing it to compulsorily acquire all shares.

Vector made its full takeover offer after US energy giant Aquila decided to sell its 70 per cent stake in UnitedNetworks.

The three councils will divide most of the money among themselves according to population. But $8.9 million will be held in trust to pay for undergrounding projects.