Meridian Energy's unexpected special dividend results from excellent Board governance and skilled management, State Owned Enterprises Minister Mark Burton said.

"Meridian Energy, the largest state-owned electricity generator and retailer, is performing very well.

"As would be prudent for any commercial enterprise, the Board is constantly reviewing the company's balance sheet. The Board has now decided that with its relatively low gearing, a $100 million special dividend is appropriate.

"As a shareholding Minister, I welcome this decision by the Board," Mark Burton said.

"In broad terms, Crown-owned companies should distribute all funds that are surplus to their requirements to the shareholder.

"In assessing a company’s requirements, consideration needs to be given to factors such as:
* maintaining an appropriate and sustainable capital structure consistent with commercial norms;
* maintaining an appropriate credit rating;
* prudent working capital requirements; and
* a company’s medium-term capital expenditure and investment requirements.

"Meridian has taken all these factors into account before notifying the government that a special dividend will be paid.

"Meridian Energy is a very successful commercial operation and it also fulfils the government's expectation that state-owned companies should be good corporate citizens.

"Its performance illustrates why the government has a general policy of retaining state-owned enterprises and building their value for the benefit of all New Zealanders," Mark Burton said.

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