Trustpower shareholders smarting at TECT cheque proposal

Michael Midgley CEO New Zealand Shareholders' Assn. Photo/Supplied.

Sharemarket investors are unhappy at the "significant effect" that the announcement to phase out TECT cheques has had on the value of Trustpower shares.

New Zealand Shareholders Association CEO Michael Midgley said the share price had shown no signs of recovery.

"In our view this was an entirely predictable outcome," he said in a letter to TECT chairman Bill Holland.

Midgley was commenting on the Tauranga Energy Consumer Trust's proposal to wind up the current trust and transfer its assets into the Tauranga Energy Charitable Trust so that all income was distributed to community organisations. TECT's assets largely comprised a 26 per cent holding in Trustpower.

"The trust's action has been to the detriment of other shareholders as well as the current and future beneficiaries of the TECT shareholding," Midgley said.

The association has asked TECT to consider whether there were other ways to achieve its objectives in order to allow the share price to recover.

Holland said TECT's responsibility as trustees was not to Trustpower shareholders but TECT's beneficiaries.

''We took expert advice before making this move and we believe the market has over-reacted to our announcement and the share price will recover."

Submissions to TECT on the proposal closed on Thursday. It has generated more than 12,000 responses from Trustpower customers in the Western Bay - about 20 per cent of those who received annual cheques from TECT.

TECT said in a statement today that the counting of submissions was still going on and a final total would not be available until next week.

Verbal submissions on the TECT proposal takes place over three days next week at the Historic Village's Village Cinema, starting Wednesday March 7 at 9.30am. Monday March 12 was an additional day if needed.

Trustpower share price since the January 25 TECT announcement
Last sharemarket sale price on day before announcement: $5.94
Last sale price on day of announcement: $5.72
Last sale price a week later: $5.33
Last sale price on March 1: $5.22
52 week high: $6.05