Merrill Lynch to look at possible Vector sale

By Geoff Senescall

Merrill Lynch has been appointed to evaluate the Auckland-based electricity lines distribution company Vector as a possible precursor to selling the $2 billion asset.

Such a move could lead to a major payout to Vector's 250,000 consumers.

However, it was too early to start speculating on such things, said Michael Barnett, chairman of the Auckland Electricity Consumers Trust.

The trust has been given control of Vector for a period of 80 years, of which it has around 73 to go.

Merrill Lynch had been given a "blank sheet of paper," he said.

"Its job is to scope the asset and look at the best structure and ownership of Vector and then to come back with recommendations to the trust in respect of the optimum structure and future ownership.

"Certainly at one end of the scale you have got total sale," Mr Barnett said. At the other end there might be just a partial sell-down with the trust continuing to have a role.

Part of the reason for the scoping study was to determine whether the trust should continue to have a role.

"That is probably the biggest question of all," Mr Barnett said.

"The electricity reforms have imposed a totally different environment on the trust by comparison to what was put in place four or five years ago.

The scoping study, taking six weeks, will also include communication with Vector's beneficiaries - the consumers and the councils.

If there is to be a distribution of funds the study will determine how best this can be done.