Trustpower's shareholders have overwhelmingly voted to carve out its windfarms and renewable development pipeline, splitting the company into two separate businesses that will be listed on the NZX and ASX.

Under the proposal Trustpower keeps the transtasman generation assets, while Tilt Renewables gets the wind projects that are either in development or planning stages and are situated mainly in Australia. A court-approved scheme of arrangement would see shareholders receive one share in each of the companies for every share they currently own.

At the company's special meeting yesterday, 99 per cent of shareholders voted in favour of the demerger, while 81.2 per cent voted in favour of the board being paid for extra work undertaken in connection with the demerger, although 90 per cent of shares weren't voted on that resolution.

Both the new shares will start trading on October 13, with Trustpower's existing shares last trading on October 11.


Copies of the presentation to investors delivered at yesterday's special meeting highlighted Australia's requirement for about 5000MW of renewable capacity to be built within the next five years in order to meet the federal government's renewable energy target.

Tilt Renewables would target a dividend payout of 25-50 per cent of its operating free cash flow after debt servicing, reflecting the board's view that a significant level of earnings be retained to fund medium-term growth. The first dividend would be paid in December.

Tilt's revenue and earnings before interest, taxation, distribution and amortisation (ebitda) would be mainly driven by Australia. About 74 per cent of revenue would come from across the Tasman and that side of the business would make up 69 per cent of ebitda for 2016.

Some 66 per cent of installed capacity is in Australia and 34 per cent in New Zealand.

It would have about A$100 million ($103m) of committed debt facilities and A$15m for working capital.

An independent advisor's report on the deal estimated the transaction and other one-off costs from the demerger to be between $75m and $90m, an immaterial amount if the split benefits are achieved but representing a loss in shareholder value if they aren't.

Trustpower will now focus on executing its retail strategy to attract customers and the products they take. The power company has moved into the telecoms market and is trying to persuade people to sign up to take broadband and phone services alongside electricity and gas, a new market in which they'll compete with the likes of Spark New Zealand.

The company is NZ's fourth largest energy retailer, with about 13 per cent or 280,000 connections.

It has 31,500 gas connections and 65,000 telephone and broadband connections, employing 750 people.

Chief executive Vince Hawksworth said customers who also took telecoms connections were much less likely to switch to a different electricity or gas provider, with a churn rate half that of customers who didn't take phone and broadband through Trustpower.


• NZ's fourth largest energy retailer
• 13% share, or 280,000 connections.
• 31,500 gas connections.
• 65,000 telephone and broadband connections.
750 employees.