Don't use

  • 18/12/2015
Don't use

Utility company Trustpower plans to spin out its windfarms and renewable development pipeline into a separate business, and has the blessing of majority shareholder Infratil to do so.

The Tauranga-based company is considering a demerger where it would split the business into two separately-listed companies. One would hold its trans-Tasman windfarms and its wind and solar development projects, and the other would keep the remaining assets such as its hydro-generation and retail network under the Trustpower brand.

The transaction still requires board approval but already has strong support from Infratil, which owns 50.6 percent of the electricity generator and retailer.

"Given the significance of the opportunity in front of us, we have been considering the most efficient way to fund the next phase of the wind development pipeline over an extended period," chairman Bruce Harker said.

Last month Trustpower downgraded its assessment of its Snowtown wind farm in South Australia by 9.4 percent in what it said was an average year for wind, and recently lodged a $126.6 million takeover bid for King Country Energy.

If it proceeds, the demerger would be through a court-approved scheme of arrangement, and would give investors one share in each of the companies for every share they hold in Trustpower.

It would also need shareholder approval, with a meeting likely to be called in the second quarter of next year.

Trustpower chairman Bruce Harker will step down from the board at the end of the year to chair the wind generation business, and will be replaced by HRL Morrison & Co executive Paul Ridley-Smith.

Shareholders are expected to get more details by the end of February.

Trustpower shares slipped 0.1 percent to $7.39, and have declined 6.3 percent this year. Infratil shares were down 0.3 percent to $3.13, and have gained 6.7 percent

NZN