Contact picked to buy TrustPower

Friday 10th August 2001

Contact Energy is said to be close to buying troubled electricity retailer TrustPower, as foreshadowed by The National Business Review (July 27).

This week Reuters news service reported unnamed sources saying Contact is preparing a takeover bid of TrustPower and is in discussions with shareholders.

Analysts have picked TrustPower as the next casualty of the electricity crisis because the company has 280,000 customers and insufficient generation capacity to meet its needs.

A Contact spokesman refused to scotch the rumour, saying, "we aren't commenting on speculation."

TrustPower spokesman Graeme Purches said he is "not aware of any moves to put the company on the market."

"TrustPower is not in discussion with Contact, which is not to say one or more of our shareholders are [in discussions]," he said.

TrustPower's four major shareholders are Infratil and Alliant Energy, which together hold a combined 46.8%, The Australian Gas Light Company (20.5%) and the unlisted Tauranga Energy Consumer Trust (22.7%).

The trust has been a vocal critic of the electricity reforms, saying its competitors were exploiting the faulty electricity market structure.

"It would be a very sad day and would significantly reduce any real competition if TrustPower was forced to exit retailing because of the failure to have disciplined commercially run state-owned enterprises," trust chairwoman Jan Beange said.

Comments from our readers

No comments yet