Hutt Mana sells 6.65pc stake in NGC

1.15pm

Hutt Mana Energy Trust said today it had sold its 6.65 per cent stake in gas network company NGC Ltd.

It sold the 51.5 million shares at $1.58 each compared with the $1.69 price the stock closed at yesterday.

NGC shares fell 4c to $1.65 on market today.

Trust chairman David Ogden told NZPA he was pleased with the share price.

Last year, the trust had the shares in its books at just over $1 a share. In March, it sold 15.5 million shares for $1.40 a share.

Hutt Mana has been a shareholder in NGC since the company bought power generator and retailer TransAlta New Zealand in 2000. NGC was nearly bought to its knees in 2001 because of that purchase and the subsequent winter power crisis that exposed its lack of hedging.

However, NGC has since been on a recovery track and its shares late last month hit a 2-1/2 year high.

The trust decided late last year to sell its NGC shares, after consultation with its beneficiaries. It reduced its stake by 2 per cent in March.

Mr Ogden said the trust would make an announcement later this week on what it does with its $160 million of cashed up assets.

A legal challenge to a distribution of the trust's assets to the 84,000 beneficiaries in the Hutt, Porirua, Tawa and Johnsonville was flagged in June. Each trust beneficiary stands to receive about $1900.

A local group called Build the Future said then that under the trust deed electricity customers in the district were only entitled to earnings (or income) from the trust each year, but the beneficiaries of the fund itself are the "communities within the district".

The group says Justice Wild, in a judgment related to a challenge to the trust two years ago, said the trust was set up for the purpose of holding assets on behalf of and for the benefit of the wider community.

The group claims that under the Hutt Mana Energy Trust deed the beneficiaries of the capital of the trust were "communities within the district".

If the trustees decided to give all the money to customers, there would be a legal challenge.

Mr Ogden the trust had advice Build the Future's views were incorrect.

The trust deed said that if a decision was made to wind up the trust it would have to wait a year before distributing the capital to customers.

The trustees had powers to change the deed to clarify who the capital beneficiaries were, Mr Ogden said.

Whether there would be a distribution "was the $64 question", he said.

"We will be making an announcement later in the week about the future of the trust and its holdings."

Last night's share sale was primarily to institutions.

- NZPA