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Contact sells Stratford assets

By Ben Dutton

Monday 14th August 2000

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Contact Energy has announced the sale of the power plant from its decommissioned Stratford station to a U.S. buyer for $23 million.

Contact Energy will keep ownership of the Stratford site for future development purposes with the power plant being sent overseas.

Contact's CEO Paul Anthony said that Contact is pleased with the deal. "The power plant was decommissioned almost a year ago and Contact will now book a healthy profit on the sale."

Because of this sale and other one-off items, Contact expects to meet its profit forecast for the year and also achieve the growth in dividends as detailed in the prospectus.

Mr Anthony commented on the warm winter New Zealand has experienced, saying "Contact performs best if it is cold and dry. This year, the winter has been far from normal, with temperatures in July being the second warmest since 1853."

The warmer temperatures mean that Contact's customers have been using less electricity and as a result Contact has softer wholesale revenues.

On Friday, Contact's share price dropped following news that the company's new Otahuhu B power station will be out of action for at least six months.

Contact recovered slightly from Friday's close, finishing the day up 6c to $2.60.

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