Contact offers $47m for KCE
Kuratau Power Station. Photo: Supplied
Contact Energy has put in an offer for the remaining 24.98% of King Country Energy Ltd.
By Dan Hutchinson
Contact already owns 75.02% of the company and has put in a non-binding indicative offer to buy the remaining shares from King Country Trust.
The offer is worth $47 million, subject to adjustments and final agreement between the parties and was expected to be paid through the issue of Contact Energy shares.
The trust serves about 10,300 beneficiaries, who are generally electricity consumers connected to the lines network within the former King Country Electric Power Board supply area. That includes southern and western parts of the Taupō District.
Contact already operates and maintains the company’s five small hydro power stations (Kuratau, Wairere, Mangahao, Mokauiti and Piriaka), which have a combined capacity of 53 megawatts.
The Trust has undertaken a Special Ownership Review and is now undertaking public consultation to help it decide on whether to proceed with the proposed transaction or retain its shareholding in King Country Energy.
The Special Ownership Review considers whether retaining ownership in King Country Energy or proceeding with the proposed transaction is in the best interests of the Trust and its beneficiaries.
As part of this process, Northington Partners completed an independent assessment of the Trust’s ownership options, including the merits of the proposed transaction.
Trust Chairman Uwe Kroll said the review and consultation process is focused on ensuring the Trustees make a decision that reflects the long-term interests of beneficiaries.
“This consultation is about making sure we fully understand beneficiary and community views before determining the best long-term outcome.”
Public consultation is expected to begin shortly and run for about one month.
If, following consultation, the parties decide to proceed, a sale and purchase agreement could be signed and completed in the second quarter of 2026.
King Country energy director and Contact hydro development manager Todd Mead, says Contact would take full ownership of King Country Energy’s stations if the Proposed Transaction proceeded.
“We’re committed to remaining active in the local community, strengthening relationships and partnerships with local iwi, and continuing to invest in King Country Energy assets, ensuring they operate reliably and safely into the future.”
Trust has changed from its original beginning and now manages a diversified portfolio of investments.
The trust’s history started in 1925 when Taumaranui Borough Council voted to bring electricity to the town. The southern Lake Taupō area was added to the district in 1960 including the townships of Tokaanu and Tūrangi.
In 1962, the King Country Electric Power Board constructed a hydro generating station on the Kuratau river near Tūrangi with a small storage lake.
Government regulations and various changes of ownership have seen the trust divest its ownership in electricity assets in favour of a more diversified portfolio.
Beneficiaries of those investments are still electricity consumers in the Trust’s area comprising Tūrangi, Taumarunui, National Park, Ohakune and Ohura, as well as the surrounding rural areas. They received, on average, a $190 credit on their power bill last year.