1 Oct 2008

No impact expected from Wachovia takeover

3:34 pm on 1 October 2008

Transpower says trouble at an American bank, one of a number of companies it leases the national grid to, should not have any impact on the lines company.

Wachovia is in severe financial trouble and has been forced to sell its assets to financial services company Citigroup.

Transpower leases the national grid for tax purposes.

Chief executive Patrick Strange told Morning Report that Wachovia's problems will not affect the lines company.

Mr Strange said it just means it will have a different counter-party involved.

However, he said the financial turmoil in the United States means Transpower is watching the arrangements closely.

Wachovia was the fourth-largest bank in the United States. It was taken over by Citigroup on Monday for $US2.16 billion in stock in a deal brokered by the US regulator Federal Deposit Insurance Corp.

It is the latest casualty of a crisis that has led to changes at Goldman Sachs Group Inc and Morgan Stanley, shotgun sales of Bear Stearns Cos and Merrill Lynch & Co, and bankruptcies of Lehman Brothers Holdings Inc and Washington Mutual Inc.