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


Contact Announces Red Energy Sale

12 November 2004

Contact Announces Red Energy Sale To Snowy Hydro Limited

Contact Energy Ltd has sold its Victorian retail business, Red Energy, to the New South Wales-based Snowy Hydro Limited, Contact’s chief executive, Mr Steve Barrett, announced today.

“Contact has recently reappraised its Australian investment strategy, and concluded that the commercial logic for pursuing an integrated energy business in Australia has changed fundamentally,” Mr Barrett said.

“For a variety of reasons, including the recent change in majority shareholder and the emergence of new opportunities in New Zealand, we have determined that Contact’s focus should be concentrated in the New Zealand market,” Mr Barrett said.

“This does not rule out investment in Australia if particular opportunities arise. However, we will no longer be pursuing a stand-alone integrated energy business model in Australia.

“Red Energy was launched earlier this year as a start-up retailer in Victoria. While it has met or exceeded targets for its first five months of operations, we are conscious that Red is still in its early development phase.

“We are naturally delighted that Snowy Hydro has recognised the potential in Red Energy,” said Mr Barrett.

The sale terms reflect Red Energy’s start-up status, and there is a nominal up-front payment from Snowy Hydro to Contact, with the balance of the sale price being paid over three years, subject to Red Energy achieving certain targets over the period.

As a result of the sale, Contact will write off its net investment in Red Energy. This is not expected to have a material impact on Contact’s annual earnings. Future sale payments based on Red Energy’s performance will be booked as income by Contact at the time they are received.

In conclusion, Mr Barrett paid tribute to the Red Energy team, led by Contact’s former Chief Information Officer, Iain Graham.

“The Red Energy team have done a great job and overcome many hurdles. I particularly want to compliment Iain Graham for his leadership during the challenging start-up phase, and through the recent sale process.”

“While the creation of a start-up Australian retail business no longer fits with Contact’s strategy, we are pleased that Snowy Hydro has seen the potential in Red Energy, and chosen to pursue this development.”


© Scoop Media

Business Headlines | Sci-Tech Headlines


Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>



Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news