By CHRIS DANIELS
Dividends for Auckland power users could double under a new, partially privatised Vector.
New Zealand's biggest power lines company said yesterday it had won the bidding war to buy two-thirds of gas transmission company NGC and will be partially privatised within a year.
The share float and stock exchange listing
will mean 24.9 per cent of the enlarged Vector will be owned by private investors, rather than being wholly in Aucklanders' hands.
A sale of shares will be needed to help pay for the $1.3 billion takeover.
Vector chairman Michael Stiassny said buying NGC would be "exceedingly beneficial" to Vector's beneficiaries. Dividends - the most recent was $170 per household - would increase and the company would be worth much more.
Some projections estimate dividends might nearly double to $300 if Vector gains full control of NGC.
Powerline undergrounding projects are also assured, says Vector. Each year $10 million is put aside for undergrounding, before any dividend is paid out.
The deal was a bitterly contested issue for the Auckland Energy Consumer Trust, which owns Vector.
Three of the five trustees opposed the float.
However, chairman Warren Kyd took court action and barred trustee John Collinge from voting, on the grounds that Mr Collinge owned corporate bonds issued by Vector.
A High Court judge eventually forced Mr Collinge, his supporter Mike Buczkowski and anti-privatiser Shale Chambers to attend a trust meeting, where Mr Kyd used his casting vote to get the deal approved.
Mr Kyd yesterday said the dividends would "increase very significantly". He said the other trustees had assured him they would now "get right behind it".
Although a float meant 24.9 per cent of Vector would be owned by private investors, the trust would still be able to control it effectively.
Mr Collinge said he had not changed his mind on the deal, but there was nothing much opponents could do about it now.
Auckland Chamber of Commerce chief executive Michael Barnett said that while an attractive cash return to Vector customers was being touted, the company was "a critical strategic asset that underpins the Auckland and New Zealand economy".
