Price freeze fails to calm locals

By Dita De Boni

United Networks' commitment to freeze prices for three years was not enough to pacify hostile local shareholders at its annual meeting yesterday.

Despite this promise, chairman Bob Green and chief executive Don Bacon spent much of the meeting fending off shareholders' concerns about foreign ownership of the company.

United Networks - formerly Power New Zealand - is 78.8 per cent owned by UtiliCorp United of Kansas City.

Mr Bacon said the company would keep costs down by amalgamating its networks in Auckland, Tauranga and Wellington and seek to acquire networks in the South Island as these became available. It would also pursue gas, water and wastewater networks "as opportunities present themselves."

Mr Green confirmed UtiliCorp's intention to sell its shareholding at some time, saying United needed a "larger float in the New Zealand market."

He then had to deny that the move signalled a lack of the parent company's confidence in United or that dividends were being funnelled out of New Zealand.

"We book the profits, but not a cent goes back to Kansas in dividends," he said.

Mr Bacon said United welcomed sensible regulation of the power industry, but was relieved that the Commerce Amendment Bill - to regulate line prices - had stalled, as it would "not have achieved the Government's objectives of lower prices for consumers."

United reiterated its forecast of a record net surplus of $93.5 million for the coming year, a 42 per cent increase from last year's $65.9 million surplus.