CKI may sell Wellington Network stake

Wellington Network is the fourth-largest electricity distribution network in New Zealand. Picture: AFP

Stakes in airports, ports and electricity assets are being assessed for sale in New Zealand, and the latest is power provider Wellington Network.

There’s some talk that Hong Kong investor CKI may be contemplating a sale of its share in the asset.

CKI purchased the stake from Vector in 2008. At the time, the deal was worth about $NZ785m.

The poles and wires would certainly be worth much more now, particularly given the huge profits power companies are reaping across the Tasman.

Helping to drive up power prices are a gas shortage and greater demand from the strong take-up of electric vehicles.

Wellington Network is the fourth-largest electricity distribution network in New Zealand and has a system stretching over 4592 km, serving the Wellington, Porirua and Hutt Valley regions.

CKI is one of the biggest owners of electricity assets in Australia, including 23 per cent stakes in SA Power Networks, Powercor and CitiPower in Victoria, and United Energy Australia.

It also owns 26 per cent of Australian Gas Networks, 8.25 per cent of the Dampier Bunbury Pipeline, 40 per cent of Multinet Gas Networks Australia, 40 per cent of Energy Developments Australia and 40 per cent of Australia Energy Operations in Victoria.

Australian infrastructure investment bankers will be clocking up more frequent flyer points crossing the Tasman in the next year as the Dunedin Council votes on September 25 on whether to sell its Aurora Energy electricity distribution network, which sources estimate to be worth about $NZ1.5bn.

Some believe infrastructure investor Igneo, which already owns similar assets in New Zealand, is a likely buyer.

A stake in the Tauranga Port is probably coming up for grabs, and potentially other infrastructure assets, such as shares in Wellington Airport.

Councils in New Zealand – many of which have already substantially increased rates for residents – are putting assets on the block as they look to pay for capital works in areas such as water services and public transport.

Meanwhile, New Zealand listed electricity provider Contact Energy has tapped investment bank UBS for its proposed $NZ2.3bn buyout of Manawa Energy, which counts Australian listed infrastructure investor Infratil as the owner of just over half of the company.

Manawa is a renewable electricity generator, owning and operating 25 hydro schemes around New Zealand, with about 500 megawatts of generation capacity.

The offer includes 0.5719 Contact Energy shares for each Manawa share, equating to $NZ4.79 per share plus $NZ1.16 per share in cash, valuing its equity at $NZ1.86bn.

Infratil and TECT, which holds about 27 per cent, are both in support of the transaction.

The deal is the largest public scrip-based peer-to-peer transaction in New Zealand history and the fifth-largest New Zealand M&A transaction in the past 10 years.