Prime soothes Powerco shareholders' worries

By CHRIS DANIELS


Fears that thousands of Powerco shareholders may be left holding unwanted, low grade bonds have been soothed, with Prime Infrastructure saying there will be no scaling back of cash payments.

Prime has successfully taken over the New Plymouth-based powerlines and gas network company, with the $2.15 offer price being accepted by 95.3 per cent of shareholders.

It is now moving to compulsorily acquire the remaining shares and remove Powerco from the New Zealand stock exchange.

Local shareholders, including those who selected to be paid all in cash, had feared they would be disadvantaged because it was likely they would end up being scaled, getting paid partly in the bonds.

Prime chief executive Chris Chapman said: "We are pleased with this outcome for Powerco's New Zealand shareholders. It is pretty consistent with where we thought it would be."

An independent appraisal said the bonds "may be worth less than their $1 face value".

But Prime said yesterday that there had been enough demand for the bonds so every Power shareholder would be paid out in the way he or she wanted, with no scaling.

Prime's first foray into New Zealand has not been a smooth one, as it first ran into political opposition from Taranaki ratepayers, upset at the district council's sale of Powerco.

Finance Minister Michael Cullen, who approved the deal under overseas investment rules, said he only "reluctantly" endorsed it. The national interest criteria had been "barely met".