KEY POINTS:
The country's biggest electricity distributor, Vector, is poised to become a cornerstone shareholder in NZ Windfarms.
Vector said yesterday it had conditionally agreed to take a stake of up to 19.99 per cent in the wind power company, worth around $18 million.
Conditions included whether NZ Windfarms went ahead with a $75 million share issue, also signalled yesterday.
NZ Windfarms said it had made no firm decision to make the issue, but a prospectus had been registered and should be out in about two weeks.
Proceeds would go towards the completion of its Manawatu wind farm and developing new sites.
If the share offer went ahead, NZ Windfarms planned to move up from its current listing on the NZAX market to the main board.
Both the issue and the cornerstone shareholding are subject to existing shareholder approval.
NZ Windfarms chairman Derek Walker said the issue and the relationship with Vector would mean the company could pursue "development options without delay".
However, "the size of the offer being contemplated is very large compared to the company's current market capitalisation and the current share-trading volumes".
If the offer went ahead, Vector would receive two places on the NZ Windfarms board. It would also have an option to buy about $5 million in shares if NZ Windfarms made a subsequent $25 million share issue in the next three years.
Vector chief executive Mark Franklin stressed the move was not a signal the company was moving into mass-market generation or retailing.
Chairman Michael Stiassny said Vector was committed to growing the company in a sustainable way.
"The future of energy supply and management is changing rapidly and we see innovative solutions such as what NZ Windfarms is doing as critical to that future."
NZ Windfarms aims to sell sustainably generated electricity from smaller, high-return wind farms close to the consumer.
It says there will be no public pool for the share issue, but there will be a priority pool for existing shareholders resident in New Zealand.
Walker said the price of the prospective offer would likely be around that paid by shareholders when they exercised their options last September.
Shares in Vector closed down 1c at $2.88 yesterday, having hit a year high of $3 on April 18. NZ Windfarms shares rose 10c to $2.
- NZPA
