4 Jul 2013

AMP Capital to buy stake in Powerco for $525m

9:06 pm on 4 July 2013

Australasia's largest fund manager AMP Capital has agreed to buy a 42% stake in Powerco for more than $500 million.

The New Plymouth-based Powerco is New Zealand's second largest electricity and gas distribution company, with about 420,000 customers connected to its networks.

Under the deal, the investment manager will buy the stake in Powerco from Brookfield Infrastructure for $525 million.

AMP says it is experienced with managing critical infrastructure assets and it sees significant opportunity for further growth in the Powerco business.

The fund manager of AMP's Infrastructure Equity Fund, Michael Cummings, says it was a good time to invest in the asset.

"Powerco's New Zealand's second largest electricity and gas distribution business, it operates in key growth areas and it's very well managed, it fits exactly the risk and return criteria our investors are looking for."

This sale is conditional upon approval from the New Zealand Overseas Investment Office and is expected to be completed by the end of 2013.

The other 58% of Powerco is owned by QIC, a Queensland wealth manager.