NGC sells half stake in Southdown Station

By NZPA

Wednesday 13th November 2002

NGC Holdings, until recently Natural Gas Corporation, has sealed a conditional agreements to sell its half stake in the Southdown power station to Mighty River Power for around $39.5 million.

NGC and Mighty River have been 50 percent joint venture partners in the Southdown station, a 118MW capacity gas-fired co-generation station in South Auckland.

NGC had previously flagged its intention to sell elements of its electricity generation assets.

The deal includes the output from the Rotokawa geothermal power station. NGC has no ownership interest in the station, near Taupo, but owns a purchase agreement to buy and on-sell the electricity.

NGC chief executive Phil James said the agreed price included around $7 million relating to the Rotokawa power purchase agreement interest, while the rest related to land and other Southdown-associated assets.

The transaction will also release NGC from $48 million of joint venture non-recourse debt.

Mr James said his company did not expect to realise a profit from the transactions as proceeds above book value would be applied to the reduction of goodwill.

Conditions on the deal include Natural Gas obtaining any shareholder approval required, and Mighty River concluding financing arrangements for funding.

An unconditional settlement is set for November 28.

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