MRP to quit Chilean, German geothermal investments, sticks with US plant

Tuesday 16th December 2014

Mighty River Power, the first of the state owned power companies to be partially privatised last year, will quit its geothermal investments in Chile and Germany, while sticking with its interests in the US.

The Auckland based company reviewed its international geothermal investments earlier this year and has decided to embark on a sale process for its assets in Germany and Chile, which are no longer in line with its long term goals, it said in a statement. It decided to retain the US assets, including an interest in a 50 megawatt operating plant and minority stake in a geothermal development firm, but won't commit any more development capital.

The decisions won't affect its 2015 dividend guidance of 14 cents per share, but the company is assessing the accounting implications.

"The current strategic focus is on incremental consumer focused growth options, including smart meter deployment and data services," chief executive Fraser Whineray said. "We look forward to pursuing future geothermal development options in New Zealand when commercial conditions are right for investment, as well as opportunities to leverage our expertise internationally without any significant capital investment."

MRP took control of the Chilean investment and a 20 percent stake in a Californian geothermal producer last year when it ended a partnership with the GeoGlobal Energy fund. The company wrote down the value of its German and Chilean investments by almost $89 million in 2013 financial year as those developments stalled.

At the time, MRP had already committed US$250 million to be the cornerstone investor in the US based GeoGlobal Energy fund, involving private equity fund managers who worked with MRP to identify global opportunities to invest in geothermal power projects.

Shares of MRP last traded at $3.08, and have gained 47 percent this year.

BusinessDesk.co.nz

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