Councils eye $147m windfall

By WAYNE THOMPSON

Three Auckland councils are trying to get their hands on $147 million in shares for their communities two years earlier than expected.

As part of the 1994 restructuring of the electricity industry, the Waitakere* and North Shore city councils and the Rodney District Council were to receive a 10.7 per cent share in UnitedNetworks in July 2004.

Until then, their stake was to be held through the Waitemata Electricity Trust, which is administered by trustee UnitedNetworks Shareholders Society.

But yesterday North Shore Mayor George Wood said the councils were reacting to the unexpected plans of the company's main shareholder, the American firm Aquilia, to sell its 70.2 per cent stake.

That left the councils, as beneficiaries rather than shareholders, without the flexibility to consider all options regarding the future of their 16.2 million shares in the company.

The shares could become devalued with a takeover of the company or a sale of its assets.

The councils would be left as minority shareholders, without any effective say in key decisions.

Mr Wood said that the councils had been working with the trustee and the company towards amending the trust deed.

Changing the trust deed would allow the councils to cash in if there were a bidding war for the company. But selling the shares as soon as possible had not been discussed.

Trustees society chairman Bob Stanic said he did not expect difficulty in changing the trust deed.

He said all it needed was for the councils, the company and the trustees society to be in accord over the change.

Yesterday, UnitedNetworks shares went up 10c on a falling market to $9.10.

The company distributes power to 30 per cent of New Zealand's electricity consumers and gas to more than half of the country's consumers.

* CORRECTION. In the original version of this story we incorrectly referred to the Auckland City Council rather than the Waitakere City Council.

Feature: Electricity

Energy Efficiency and Conservation Authority