Tax loss vanishes with sale

Taxpayers are doing well out of the distressed sale of a stake in Powerco by Babcock and Brown Infrastructure.

And, while many shareholders are going without dividends, BBI was paid one by Powerco last week.

BBI has announced the sale of 58 per cent of Powerco to Queensland Investment Corporation for $423 million, up from the 50 per cent it originally planned to sell.

Accounts for Powerco filed to NZX on Friday show Powerco will be unable to carry forward accumulated tax losses when BBI's stake falls below 49 per cent. At the December 31 balance date Powerco had $28.9 million of tax losses, which gives it a future income tax saving of $8.8 million.

The accounts also show that Powerco paid BBI a $5.7 million dividend on February 24.

Powerco is the nation's second largest electricity and gas distribution business with more than 400,000 customers in the North Island. BBI bought 100 per cent of it in 2004.

Powerco reported a $31.47 million loss for the six months to December but the company listed a range of one-offs. The operating profit of $18 million is up 12.6 per cent.

- NZPA