Ouch! Another slap for Natural Gas

The spat harks back to NGC's buyback of 26.5 million shares formerly held by Infratil.

NGC has already paid $34.4 million or $1.30 per share to Infratil, but the Arbitrator's award has set the value of the Infratil shares at $1.68 per share.

NGC says the buy-back procedure was invoked by Infratil in April 2000, following NGC shareholder approval of the company's purchase of a 75.8 percent interest in electricity company TransAlta New Zealand.

It's the same purchase that has been causing NGC so much grief recently after being battered by rising wholesale power prices. TransAlta - now called On energy - sold its Christchurch customer base last week and is looking at even more ways to reduce its exposure to the wholesale power market.

Both NGC and its major shareholder, Australian Gas Light, have issued earnings warnings on the back of losses at On energy.

NGC says it is still reviewing the arbitrator's award and has yet to decide if it will appeal.

Natural Gas shares have fallen from around $1.45 at the start of the year to just under 90 cents.

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