Contact Energy bucks ASX trend

The ASX announced earlier this week it would press ahead with plans to tighten the thresholds for companies which hold "foreign exempt" status, forcing more than 20 New Zealand companies to either choose a full listing or to delist from the exchange.

New Zealand companies make up more than half of the 40 companies that are currently classified as foreign exempt.

Many of the NZ firms are choosing to take up a full ASX listing because they either have a substantial business or shareholder base there but Contact, which is majority owned by US-based Edison Mission Energy, has fewer than 100 Australian shareholders.

"Dual-listing on the New Zealand and Australian Stock Exchanges has, until now, been a relatively low-cost option for New Zealand-based companies," says Contact chairman, Phil Pryke.

"However, with the forthcoming changes to the ASX Listing Rules, the board has reviewed the issue and concluded the cost of securing a full, separate listing on the ASX is not justified."

Mr Pryke says Australian investors hold around 350,000 Contact shares, substantially less than one per cent of the issued capital of the company.

Under current ASX rules foreign exempt companies pay A$15,000 a year to be listed but a full listing can cost between A$5,000 and A$100,000 a year.

New Zealand companies will also have to pay an admission fee, which is being halved if they are already listed as foreign exempt. The admission fee is dependent on market capitalisation.

In Contact Energy's case, based on a market cap of approximately A$1.87 billion, the admission fee would be around A$150,000 at the discounted price.

Auckland International Airport (NZSE: AIA), Fletcher Challenge Forests (NZSE: FFS), Fletcher Building (NZSE: FBU), Nuplex (NZSE: NPX) and Waste Management (NZSE: WAM), Air New Zealand (NZSE: AIR), Tower (NZSE: TWR) all indicated Friday that they would be seeking a full listing on the Australian exchange. IT Capital (NZSE: ITC) says it will delist.

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