Tauranga Energy Consumer Trust (TECT) has sold 20 million of its shares in Trustpower, in the interests of diversifying its investment portfolio.
This reduces TECT's holding from 33.2 per cent to 26.8 per cent of shares in the company. The shares have been sold at a price of $7.74 pershare, totalling gross proceeds of $154,800,000.
The sale of 20 million shares - which represents 19.3 per cent of TECT's shareholding in Trustpower, and 6.4 per cent of Trustpower's shares on issue - ensures TECT retains the same degree of influence around the Trustpower board table.
TECT Chairman Bill Holland said the decision to diversify followed a robust decision making process driven by a need for financial prudence and follows the Trust's Share Ownership Review.
The review, and subsequent Consumer consultation, was held in 2013 when it was resolved that Trustees had the right to sell 6.55 per cent of the shareholding in Trustpower if they considered it in the best interests of TECT and its consumers.
"It is a sound business decision in line with our strategic priority of ensuring prudent management of the Trust's investment portfolio," Mr Holland said.
"TECT Trustees retain their confidence in Trustpower. Trustpower continues to have excellent prospects and for this reason we remain committed to the company long term and have ensured our influence is retained. Our ownership in Trustpower still accounts for more than 80 per cent of Trust assets."
Mr Holland said the restructuring of assets was not anticipated to adversely affect TECT's grants programme or annual pay-out to its consumers, with TECT committed to maximising the investment returns for the benefit of consumers.
It is a sound business decision in line with our strategic priority of ensuring prudent management of the Trust's investment portfolio.
"We will continue to be driven by a desire to manage our investments in a manner consistent with our Trust deed and values so that the funding available to benefit Consumers, and future generations of Consumers, will be maximised.''
Demand for the Trustpower shares was strong, with allocations being made to a broad range of NZ and Australian institutions and retail investors. Following the sell down TECT remains a 26.8 per cent shareholder of Trustpower. TECT confirmed it has no intention of selling any further Trustpower shares in the foreseeable future.
Craigs Investment Partners was Sole Lead Manager and Bookrunner to the transaction. The current hold on trading in Trustpower shares will be lifted at 2pm today.
