Powerco says share offer undersubscribed

By NZPA

Friday 6th December 2002

Power Co said today there was a 12 percent shortfall in its share offer, which would be taken up by underwriters Macquarie Equities.

A total of approximately $131.5 million (82.2 million shares) was subscribed by shareholders and other investors.

Powerco said it had been advised that nearly all of the 11.6 million shares taken up by Macquarie had already been placed with institutional and other investors, since November 29 when the offer closed.

Macquarie now has approximately 1.6 million Powerco shares (1.7 percent of the offer), which will amount to 0.5 percent of Powerco.

The final allotment of new shares is expected to occur on Wednesday.

Chief executive Steven Boulton said the company was pleased with the strong investor support, given the size of the non-renounceable offer and soft equity market conditions.

"Powerco is forecasting a final dividend for the 2003 financial year of 8 cents per share, and total dividends for the 2004 financial year of 16 cents per share -- a strong position in the current climate."

Following the acquisition of some of former UnitedNetworks assets, Powerco is New Zealand's largest gas distribution company and second largest electricity lines company with 390,000 connections.

Mr Boulton said integration of the UNL assets was on schedule and expected to be completed by the target date of January 31.

"Powerco has had our integration teams working through their structured processes and we have not had any surprises through the implementation of our integration plans.

"Our integration budget is on target and the synergy benefits, as expected, are also being delivered."

The retail component of Powerco's capital raising raised $150 million, which would be used to partially fund the acquisition of the UNL assets.

The remaining funding was provided through the debt markets.

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