AGL nervously awaits On Energy review

By Phil Boeyen, ShareChat Business News Editor

Thursday 21st June 2001

Majority Natural Gas (NZSE: NCH) shareholder, Australian Gas Light, put trading in its shares on hold Thursday as it awaits a revaluation of NGC's electricity business.

NGC announced Wednesday it was reviewing its On Energy electricity retail and trading business in light of soaring wholesale power costs, which have forced it to hike up power prices to consumers.

Thousands of On Energy's customers are looking to jump ship in the wake of the increased charges. Before the latest debacle On Energy was already facing an uphill battle to try to win back customers who had shifted to other suppliers when the firm was still trading under the TransAlta brand.

The Natural Gas board were due to meet late Thursday to review the value of the On Energy business.

AGL told the Australian Stock Exchange that the trading halt is required as a result of press reports, in particular from the Australian Financial Review, that the company is facing an asset write-down of up to $200 million on its 66% owned New Zealand subsidiary.

Ratings agency Standard & Poor's this month place Natural Gas on CreditWatch with negative implications because of the cash flow concerns over the increased wholesale power prices.

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