$14m bonus for work on Infratil's Aust electricity businesses

By NZPA

Tuesday 15th May 2007

A $14 million bonus is to be paid for work done in building Wellington-based infrastructure investment company Infratil's Australian electricity businesses, The New Zealand Herald reported today.

This year Infratil Energy Australia acquired 100% of energy retailer Victoria Electricity, a transaction that triggered the obligation to pay its management company Morrison & Co the $14 million.

Lloyd Morrison, Infratil managing director and Morrison and Co chairman, said the payment was required under a fee structure approved by shareholders five years ago when the company began investing in the Australian energy industry.

Those first investments were part of a venture capital portfolio for which Morrison & Co received little payment for its management. But under the agreed fee structure, Morrison & Co was to receive 20% of returns in excess of 17.5% per annum on particular investments, including Victoria Electricity.

With net investment in the business of $113 million to date, Infratil Energy Australia is now valued at $206 million.

Infratil yesterday reported a net profit of $34.7 million in the year to March 31, up from $8 million last year.

The company usually cautions against reading too much into its annual operating statement because it is an investment company.

Consolidation of its investment in TrustPower for the first time and a number of one-off transactions also made it difficult to compare this year with last year.

But the company said that it had a successful year as measured by returns to shareholders, transactions undertaken and progress at each of its businesses.

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