Trustpower demerger gets final High Court go-ahead

By David Porter

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Trustpower chief executive Vince Hawksworth is happy the demerger is almost complete. Photo/file
Trustpower chief executive Vince Hawksworth is happy the demerger is almost complete. Photo/file

Bay of Plenty-based power company Trustpower received the final go-ahead from the High Court this week to proceed with its planned demerger, which is scheduled to complete by early November.

The process will create two separately listed companies. One will hold Trustpower's transtasman wind farms and its wind and solar development projects, and the other will keep the remaining assets, including its hydro-generation and retail power, gas and telcom/internet network under the Trustpower brand.

The proposal, which was first floated by the board in December 2015, and formally confirmed in March, was passed by an overwhelming majority at a meeting of shareholders, held on September 9.

"It's been a very long journey with a few twists and turns, but I'm happy that we're almost there," Trustpower chief executive Vince Hawksworth told the Bay of Plenty Times.

The demerger was temporarily put on hold on October 5 after a devastating storm in late September caused severe damage to the transmission system in South Australia, where Trustpower's key Australian wind farms, Snowtown 1 and Snowtown 2 are based.

Trustpower's generating assets were undamaged and the demerger process was resumed on October 17, with the final High Court judgement approving the demerger scheme of arrangement issued on October 19.

In his judgement, Justice Fogarty noted the demerger had been approved by 99.06 per cent of the shares entitled to vote who voted on the demerger, and 84.81 per cent of the total number of votes able to be cast by all those shareholders entitled to vote.

"It is obvious from the above figures that a very large majority of the shareholders approved the demerger," Justice Fogarty wrote.

Mr Hawksworth said the judgement was the final go-ahead. "There are no other obstacles and it's now a process issue."

Under the demerger arrangements Trustpower shareholders will receive shares in each of:

• Tilt Renewables - which will hold Trustpower's Australian and New Zealand wind generation assets and its wind and solar development projects.

• Bay Energy ("New" Trustpower) - which will continue to operate Trustpower's New Zealand and Australian hydro generation assets and its multi-product New Zealand retail business. Bay Energy will be renamed Trustpower after the current entity is delisted.

Both Tilt Renewables and the new Trustpower will be listed on the NZX main board. Tilt Renewables is also expected to be listed on the ASX.

Trustpower shares are scheduled to cease trading on the NZX on 26 October, with the new Trustpower and Tilt Renewables expected to begin trading on a conditional settlement basis from 28 October.

Normal trading of the new companies is expected to resume on 1 November, though the indicative times are subject to change.

Mr Hawksworth will continue to head up Trustpower, while former Trustpower chief financial office Robert Farron has been designated chief executive of Tilt Renewables.

Factbox

' New' Trustpower
• Will retain Trustpower's name and brand
• New Zealand's fifth-largest electricity generator and fourth-largest energy retailer by market share, with an approximately 13% electricity retail market share
• Will own 22 hydro power schemes throughout New Zealand and Australia with a total installed capacity of 516MW
• Will operate a multi-product retail business, including electricity, gas and telecommunications services with approximately 280,000 electricity customer connections, 31,500 gas customer connections and 65,000 telecommunications customer connections
• Will have approximately 750 full time equivalent employees

Tilt Renewables
• Owner, operator and developer of a portfolio of wind farms across Australia and New Zealand
• An approximately 11% market share of installed wind capacity in Australasia
• Assets will comprise 307 operating turbines across 7 wind farms, with a total installed capacity of 582MW
• Assets will include Australia's second largest and New Zealand's largest wind farms
• A development pipeline of 8 further wind farm projects, with the potential for more than 2,000MW of installed capacity.
• Will have approximately 35 full time equivalent employees

- Bay of Plenty Times

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