NGC reveals value of power customers

By Phil Boeyen, ShareChat Business News Editor

Thursday 13th September 2001

Natural Gas (NZSE: NCH) is likely to receive around $110 million for selling its North Island retail electricity business to state-owned Genesis.

The sale was announced at the end of July but no price had been given.

NGC says it received 70% of the price in cash on settlement, but the balance is being held in escrow pending the completion of audits.

Under the deal Genesis bought around 290,000 customers, business records and hedge arrangements associated with NGC's retail electricity business in the North Island.

In turn, NGC agreed to pay $44 million for approximately 280,000 electricity meters and 75,000 meter relays from Genesis. It has also paid 70% of the purchase price in cash, with the remainder in escrow.

Both purchase prices are to be finalised, following an audit of customers and meter numbers as at the settlement date, expected to be completed early next month.

NGC says it will advise the market at that time of the final figures.

The company got out of the retail power market after suffering huge losses as a result of high wholesale electricity prices caused by a dry, cold winter. It sold its South Island customers to another state-owned generator and retailer, Meridian.

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