Half of Powerco, New Zealand's second biggest energy network company, is being put up for sale by its Australian owner Babcock and Brown.
Headquartered in New Plymouth, its network area spreads across the upper central and lower central North Island servicing around 400,000 consumers. It has nearly
half of all New Zealand's gas connections and 16 per cent of the electricity connections.
Just over half of its shares were owned by local body councils in its home area, who sold them to Babcock and Brown in 2004.
The total value of the Powerco takeover was $680 million.
This new sales move comes after Babcock and Brown, a listed infrastructure investor, announced the launch of a "Capital Management Review" on June 19. This was designed to "ensure the maintenance of a strong balance sheet with the capacity to fund future attractive organic growth opportunities."
It was now considering initiatives to "assist in closing the gap between the underlying value of the business and the current market price."
Following a number of "unsolicited approaches" Babcock and Brown said it had started formal price discovery processes looking to identify partners to "co-invest" in up to 50 per cent of Powerco.
A further update on the sales process will be made when the company releases its annual results on August 26.
Vector, New Zealand's largest energy network company, last month finalised the sale of its Wellington electricity network to Chinese infrastructure investor Cheung Kong Infrastructure Holdings (CKI) for $785 million.
- HERALD ONLINE
