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Meridian cancels bond; Powershop CEO off leash

Meridian cancels retail bond issue; Powershop CEO off leash

By Pattrick Smellie

Dec. 10 (BusinessWire) - Meridian Energy is demonstrating its displeasure with electricity reforms announced yesterday by cancelling what would have been its first retail debt issue, while the head of its subsidiary retail brand, PowerShop, made comments highly critical of the reforms.

"There is a high risk the proposed reforms for the energy sector, released today by (Energy) Minister Gerry Brownlee, will do exactly the opposite of what the Minister intends and actually raise electricity prices and reduce the security of power supply to New Zealanders," said Ari Sargent, ceo of Powershop, launched earlier this year by Meridian, and named the cheapest electricity retail brand by readers of Consumer magazine this week.

The reforms were as big or bigger than the Bradford reforms of the 1990's, and were "poorly thought out".

"The lack of competition in the market does need to be addressed, as it leads to Kiwis paying grossly inflated prices for power," Sargent said. "However, there will be unintended consequences associated with many of the proposed reforms, which could lead to prices increasing even further."

Meanwhile, the New Zealand Press Association reports that Meridian Energy has suspended issue and renewal of its renewable energy notes, because of Brownlee's announcement that he will take away two of its hydro electricity stations at the top of the Waitaki hydro scheme.

Meridian offered the energy notes under an investment statement on October 29.

Meridian has ceased to accept all new applications for the notes and maturing notes will be unable to be rolled over, but existing notes are unaffected by this suspension. It said the suspension will continue while it studies the detail of the announcement and its effect on the offer documentation

(BusinessWire)

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