9 Aug 2013

Meridian CEO knows date of share sale

8:24 am on 9 August 2013

The head of state-owned power company Meridian Energy says he already has the date for when the Government will start selling shares in his company to the public.

The Government wants to sell 49% of Meridian before the end of the year, and clearing away uncertainty over an electricity contract with the owners of the Tiwai Point aluminium smelter has paved the way for the share sale.

A deal announced on Thursday between Meridian and the smelter owners, who will receive $30 million from the Government to seal the agreement, will ensure the smelter remains open until at least January 2017.

Mark Binns.

Mark Binns. Photo: MERIDIAN ENERGY

The state-owned power company and New Zealand Aluminium Smelters (NZAS) announced on Thursday they had reached a deal that cut the cost of electricity by an undisclosed amount. It allows later price rises if the New Zealand dollar value of aluminium rises above agreed levels and the contract can be terminated in 2017.

Meridian chief executive Mark Binns says he knows when the Meridian share sale will occur but is not revealing the date.

Mr Binns says there was no Government interference in Meridian's negotiations with the smelter owners.

"They have said that that is up to management of the board of Meridian and the shareholders of NZAS to come to a commercial agreement and they constantly ensured that the parties got back together and tried to hammer this out."

The contract sets the price the smelter pays for electricity below the previous contract but Mr Binns would not say how much lower it is, other than it was a meaningful decrease.

However, the smelter says the price has reverted to that which it was paying last year.

Mr Binns says Meridian hasn't moved on price since March, although it has varied other aspects of the contract.

He says the financial impact of the deal will be disclosed in Meridian's accounts.

Meridian is due to release it annual results on Monday 12 August.