A Northland business has dropped plans to buy Tonga's state power company in the wake of riots that destroyed much of the kingdom's capital.
A final deal, just two months away, would have seen Northpower buy Shoreline's electricity distribution and generation assets across the four main islands.
Despite
the setback, the company wants to maintain its links with Tonga and has offered its expertise to help in any way required.
Northpower chairman Warren Moyes said the company had been actively involved in the sale process since June this year.
He said the deal was structured so that several conditions had to be met prior to settlement, including legislative changes by the final Tongan session of Parliament for 2006.
Mr Moyes said Northpower went into the deal fully aware of the challenges, and had made sure the risks were kept to a minimum.
"Now more than ever Tonga needs to know that these historical relationships have substance and there may well be a role for Northpower in the future delivery of electricity to the Tongan consumers," he said.
A disappointed Northpower chief executive Mark Gatland said it was one of those deals that didn't work out.
Despite the setback, the company was still keen to assist in any way it could.
Mr Gatland said the company was glad that the costs involved in the purchase process had not been completely lost, because it had helped develop the skills of Shoreline employees.
Northpower's employment of 25 Tongan linesmen around the North Island would not be affected.
Tongan sources said opposition to Northpower's plans to buy Shoreline was partly behind the riots.
The deal was initially said to be worth around $46 million but the actual price - thought to be considerably less - has not been disclosed.
- NORTHERN ADVOCATE (WHANGAREI)
