Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Vector announces $350m capital bonds offer


Urban utility network manager VECTOR Limited announced today that it intends to issue up to $350 million of capital bonds to provide a source of funding for its takeover offer to UnitedNetworks Limited shareholders.

The minimum interest rate on the capital bonds will be 8.25 per cent.

"This is the first opportunity for the public to invest with VECTOR and it is centred on a transaction which will bring together under one ownership the two largest energy distribution businesses in New Zealand," said VECTOR chairman Michael Stiassny today.

"The capital bonds will partially finance the UnitedNetworks acquisition."

ABN AMRO Rothschild is Lead Manager to the offer and has also underwritten $300 million worth of the bonds. ABN AMRO Craigs is the Co-Lead Manager. The Offer Document, comprising a combined investment statement and prospectus, was registered today and the offer will open on Tuesday 1 October.

ABN AMRO Rothschild director John Moore said that bids from brokers and institutions for firm allocations during the pre-marketing process had been strong.

"Demand from retail brokers was higher than we had available for allocation and institutions also bid strongly. On this basis, nearly all of the $300 million which we underwrote has been allocated firm to a large number of retail brokers and institutions," he said.

VECTOR also reserves the right to allocate a further $50 million of capital bonds as oversubscriptions. As part of the issue, current customers of VECTOR will be given a preference, with a priority pool of $25 million worth of capital bonds (with a maximum allocation of $5,000 per customer) being reserved for them on a first-come, first-served basis.

The minimum subscription will be for capital bonds to a value of $5,000. Interest will be paid half-yearly and the capital bonds have an initial term of four years.

The capital bonds are unsecured debt obligations of VECTOR and none of VECTOR's subsidiaries nor its shareholder, Auckland Energy Consumer Trust, guarantees the capital bonds.

Investors in the capital bonds will also receive an entitlement to an allocation of ordinary shares in the event of a public offering by VECTOR and quotation on the New Zealand Stock Exchange.

"However, no absolute assurance can be given that the equity raising and quotation will proceed, and any final decision to proceed will be made by the board at a future date," said Mr Stiassny.

VECTOR has agreed to make a full takeover offer for UnitedNetworks Limited and the major shareholder, Aquila, has agreed to sell its 70.2 per cent stake to VECTOR subject to the consent of Aquila's banks. The takeover offer and the capital bonds offer will only proceed should the Aquila banks approve the transaction. The takeover offer, which the independent directors of UnitedNetworks have recommended to shareholders, is expected to be in the hands of all shareholders by the end of the week.

Upon UnitedNetworks shareholder approval of the proposed divestment of some UnitedNetworks assets to Powerco and Hawke's Bay Network, VECTOR and UnitedNetworks will own the electricity distribution networks in Auckland and Wellington regions, and the Auckland gas distribution system.

The companies will distribute electricity to approximately 615,000 customers, or more than one third of the New Zealand market.

Full details about the offer of capital bonds are contained in the Offer Document prepared, and dated as at, 25 September 2003.

© Scoop Media

Business Headlines | Sci-Tech Headlines


Media Mega Merger: StuffMe Hearing Argues Over Moveable Feast

New Zealand's two largest news publishers are appealing against the Commerce Commission's rejection of the proposal to merge their operations. More>>


Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>


Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>


Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>