A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.
A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.
Opinion
In the event that the planned sale of Eastland Network is successful, interest will turn to how the proceeds are shared and, especially, what they are applied to.
In our webpoll for the coming week we ask who people think most of the proceeds should go to — and tipthat a third option of “power consumers” will be the front-runner. Spoiler alert: power consumers won't get a look in, the proceeds will be shared between the company, Eastland Group, and its owner on our behalf, Trust Tairawhiti.
The chairmen of the two entities have not divulged how the money will be split and in part that will be because the quantum is unknown. It wouldn't be unreasonable, though, to estimate it could be $200 million after fees etc. We do know that the trust's commitment two years ago to invest $100m in community wellbeing by 2025 is a driver for the sale, providing a capital release to help achieve this. Considering it has been receiving about $10m a year from the group lately, and distributing about that sum, it seems reasonable to assume it will want about $50m from the sale.
It could take less, though. Both chairmen stressed on Thursday that they want proceeds from the sale to support Eastland Group to keep growing. Trimming debt levels will be one use, and handy as it starts into a $140m redevelopment of Eastland Port in a rising interest-rate environment. The group's plans for “recycling” sale capital are in renewable power generation, with prospects to build a second geothermal plant at its new TOPP1 site in Kawerau, and up to three solar farms and a wind farm in Tairawhiti, subject to business cases.
The trust's main commitment so far as part of its $100m pledge is $15m towards upgrading sports facilities — including the skatepark redevelopment and the pump track behind the i-Site, resurfacing and developments at Victoria Domain, waka storage facilities, upgrades at Whakarua Park, pool heating at Ruatoria, Tokomaru Bay, Tolaga Bay and Ilminster Intermediate, and a play zone in Tokomaru Bay.
It will consult with the community over investment options, and in an interesting aside at the meeting on Thursday, trust chairman John Clarke said community “wellbeing” also referred to “prosperity” . . . leaving open the trust's traditional focus of investing to support economic growth for the region.
■ In response to a question yesterday, the trust is looking to release legal advice around aspects of selling its foundation asset — after feedback from trustees.
