Sharechat Logo

Todd crystallises control of King Country Energy

Friday 16th March 2012

Text too small?

Todd Energy has sold its half-interest in the 38 Megawatt hydro-electric power station on the Mangahao River to its other shareholder, King Country Energy, in a cash and shares deal that makes Todd the 54.1 percent owner of the regional generator-retailer.

The power station, on a major tributary of the Manawatu River, has been in operation since 1924.Todd bought the business in a joint venture in 1997 with and KCE, whose shares trade on the Unlisted platform.

KCE will fund the purchase with a payment of $33.76 million cash and the issue of 7.63 million new KCE shares to Todd, at $4.75 a share, raising Todd’s ownership of KCE from 35.4 percent at present.

The other major KCE owner, King Country Energy Trust, will dilute its holding from 20 percent to 14.2 percent as a result.

KCE is also a local monopoly electricity network owner, and the purchase would allow it to increase its customer base, said chief executive Rob Foster. Customer growth has been constrained because of KCE’s limited access to additional generation output and an aversion to wholesale electricity spot market exposure.

“We only generate 125 Gigawatt hours annually, well short of our current customer demand of 210GWh,” said Foster.

Mangahao produces an average annual output of 132GWh.

“This government clearly puts King Country Energy on a path for expansion and we’re forecasting solid earnings growth once the transaction is finalised,” he said. The transaction would also allow balance sheet restructuring and increase free cash flow per share.

(BusinessDesk)

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar stalls after Bascand's rate cut comments
Bascand says RBNZ will consider changing bank capital proposals
Affordable electricity key to decarbonisation - Genesis
Graeme Hart trims global packaging empire with US$615m asset sale
Stronger-than-expected inflation won't deter November rate cut - economists
Contact in talks on 13MW dairy boiler project
Restaurant Brands forecasts 10% growth in FY2020
Domestic inflation rises at fastest annual pace in eight years
16th October 2019 Morning Report
NZ dollar falls against British pound on Brexit hopes, CPI in focus

IRG See IRG research reports