Origin sells Contact Energy stake. Keeps upstream assets in New Zealand
Australia’s Origin Energy has decided to sell its stake in New Zealand Stock Exchange-listed Contact Energy Limited. Contact is an integrated energy company, operating geothermal, thermal and hydro generation facilities.
According to a statement by Contact, Origin’s shareholding in Contact is expected to be sold to a broad range of Australian, New Zealand and international equity market institutional investors and New Zealand retail investors.
“We thank Origin for their support over the last 11 years as we have reinforced Contact’s position as a leading New Zealand-based energy company. Today marks the start of an exciting new phase in Contact’s history. Our focus remains unchanged regarding the safe operation of our business, providing customers with the quality of service and products they expect and creating long-term value for our shareholders” said Phil Pryke, Contact’s interim Chair.
The sale of Origin’s 53.09 per cent shareholding in Contact has been underwritten at a fixed price of NZ$4.65 per share (Sale). The fully underwritten sale will provide approximately NZ $1.8 billion in net proceeds to Origin.
Origin said it would use the cash to repay debt and redeem NZ$200 million of redeemable preference shares.
Origin Managing Director, Grant King said, “Today’s announcement is consistent with Origin’s stated intention to continue to take action to reduce operating and capital costs, realign debt across group entities, and, where appropriate, divest assets. The proceeds from the Sale will provide increased financial flexibility in the short to medium term.”
The Australian energy company said it would continue to hold upstream production and exploration interests in New Zealand. Origin describes itself as one of the largest holders of petroleum exploration acreage in New Zealand, where it operates several oil and gas projects.
Offshore Energy Today Staff