Squabble at TrustPower

By Mark Reynolds

Major shareholders of Tauranga-based TrustPower want to merge the company's electricity operations with the gas retailing activities of Natural Gas Corporation.

But squabbling over who will hold a controlling stake in the enlarged group threatens to kill the plan.
An agreement to create the jumbo electricity and gas distribution company requires the support of Australian Gas Light (AGL), which owns one-third of NGC and will take control of that company's retail assets if a split of NGC goes ahead as planned later this year. But AGL owns only about 11 per cent of TrustPower and wants a significantly higher stake before it agrees to make the NGC deal happen.

"Unless AGL can secure a higher stake, there is a risk they will walk away from any potential deal," said Jan Beange, head of the Tauranga Energy Consumer Trust. The trust owns a fifth of TrustPower and moved yesterday to help AGL secure a larger holding.

The trust initiated court action to stop US-based Alliant International buying a 7.6 per cent stake in TrustPower from Tauranga Civic Holdings for about $60 million. Alliant, in a joint venture with Wellington-based Infratil, already holds 36.2 per cent of TrustPower.

Jan Beange said the trust had a shareholders agreement that effectively allows it to choose who buys the Civic Holdings stake. "Our preferred buyer is AGL because of the [NGC] assets it could bring to TrustPower's operations."

Alliant agreed to suspend its purchase of the key 7.6 per cent holding, pending a court hearing in mid June. But it is possible all the shareholders could strike a deal before then.