Vector Limited (VCT)

[wsheridan]

http://stockwatch.nzherald.co.nz/announcementdetail.asp?GMC=100&ArticleId=103723


Look's like the country's wealthiest trust is flexing some muscle.... of course if they listed their asset they could disclose everything.

:D

[Lawso]

What the heck does all that mean? As a Vector bondholder and wouldbe shareholder I suppose I should plough through all that legalistic stuff but I've got better things to do. I'll wait to see what the Herald etc make of it tomorrow.

[wsheridan]

quote:Originally posted by Lawso

What the heck does all that mean? As a Vector bondholder and wouldbe shareholder I suppose I should plough through all that legalistic stuff but I've got better things to do. I'll wait to see what the Herald etc make of it tomorrow.


It means the trustees want the board of Vector to include them a bit more in their decision-making process .... they don't want them running off on a wild spending exercises that the company's only shareholder is never going to approve.

The technical hitch in this is that because your bonds are listed the company feels they cannot disclose information to one shareholders without disclosing it to the bond holders (i,.e, the exchange)

It might be that the company has lodged this expecting not to get the dispensation - so that it doesn't have to share infor with the trustees ... I would hope that isn't the case

[Lawso]

Thanks for that, WS. I guess there are tensions between the trustees and the board that will not be resolved unless there are drastic personnel changes. With the present setup I can't see any prospect of a Vector IPO.

[wsheridan]

quote:Originally posted by Lawso

Thanks for that, WS. I guess there are tensions between the trustees and the board that will not be resolved unless there are drastic personnel changes. With the present setup I can't see any prospect of a Vector IPO.


I think the IPO is closer than ever because of the will of the majority of trustees .... they also need to do it early in their term as trustees

[Lawso]

Hope you're right. You're obviously closer to the scene than I am.

[Snow Leopard]

quote:

Vector vote hinges on court

http://www.stuff.co.nz/stuff/0,2106,3033078a13,00.html

[Snow Leopard]

According to comment in Herald on Stuff etc etc.
It appears that a vote is scheduled Thursday night on "Project Nugget"[xx(], whether to do an IPO to raise money to buy NGC [:p]. Which way the vote goes depends upon whether AECT trustee John Collinge can vote and there is a court hearing today to decide this. Read the articles if you are actually interested on all the dirt of this one.

I predict that the court hearing will ajourn to a later date, reserve judgement, or decide it can not decide: i.e. do anything rather than make a decision in time. Could be wrong, often am [:0]

We wait and see [|)]

[wsheridan]

Isn't it bizarre that the one person who should be pushing for the partial privatisation - a former commercial lawyer - should now be holding it up because he has been politically shafted and wants to be all petulant. Meanwhile the trust's consumers might miss out on a great opportunity to grow their investment and the rest of us miss out on a great investment opportunity. Hopefully some sanity will prevail - though no doubt the lefty media will say the asset shouldn't be sold (even though the asset will actually get bigger)!

[Snow Leopard]

As I predicted two posts ago, the court has made a decision.

John Collinge will not be able to vote tomorrow and it now expected that the AECT will vote in favour of a partial float of VECTOR. [8D] Start stuffing your piggy banks for the IPO. :)

PS The prediction that came true is "Could be wrong, often am": Now that is hedgeing. [B)]

[wsheridan]

This would be great for the market if it can be made to happen.
Let's hope the chairman uses the power in his hands and this asset grows..... I must say I've enjoyed the ride on NGC in the past couple of years, might have to sell some for the Vector IPO

[CAM]

Yep...the family cats are even sharpening their pencils waiting for the application forms

[Snow Leopard]

For the latest episode of the "The Vector Fight" go to

http://www.stuff.co.nz/stuff/0,2106,3036155a13,00.html

Seems that the anti Project Nugget faction are using the rules to the max.

Who needs TV soaps when you have got this :D


Paper Tigers 100th post [8D]

[Morpheus]

This is a good read ...

http://www.nbr.co.nz/home/column_article.asp?id=10162&cid=4&cname=Business+Today

[foodee]

Morphues
Thanks - interesting indeed.

[Snow Leopard]

http://www.stuff.co.nz/stuff/0,2106,3037438a13,00.html

or

http://www.nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3592400&thesection=business&thesubsection=energy&thesecondsubsection=electricity&thetickercode=

It's all gone back to court again. [}:)]


This is great stuff, I can not wait for the major motion picture version. :D

Keep stuffing your piggy banks for the IPO[:p][:p], perhaps[?]

Stay tuned for the next episode. [8D]

[Mr_Market]

quote:Originally posted by Morpheus

This is a good read ...

http://www.nbr.co.nz/home/column_article.asp?id=10162&cid=4&cname=Business+Today


Hmm, NBR - probably not a good idea to criticise the Herald whilst running an ad for the Herald on the same page. Not a nice way to treat your advertisers. [8D]

[Snow Leopard]

A new week and the tension builds:

http://www.stuff.co.nz/stuff/0,2106,3038518a13,00.html
apparently Vector are going to bid for NGC today. :)

http://www.nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3592667&thesection=business&thesubsection=energy&thesecondsubsection=electricity&thetickercode=
we don't know that for sure. :(

Stay tuned folks :D

[Snow Leopard]

Welcome to your daily episode of the Vector saga :D

dum de dum de dum de dum
dum de dum de dum dum
dum de dum de dum de dum
dum de dum de de dum
(Opening music ;))

http://www.stuff.co.nz/stuff/0,2106,3039710a13,00.html

[Its back to court to get three trustees removed]

[Snow Leopard]

http://www.nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3593401&thesection=business&thesubsection=energy&thesecondsubsection=general&thetickercode=
[The messing about at the trust may impede vectors ability to bid for NGC, many companies interested in AGL's stake and closing date for offers 6-Oct].

Will Vector bid?
Will all the mucking around at the court preclude this?
Does it really matter?
Does anyone care anymore?
Where's the bottle gone?

[wsheridan]

quote:Originally posted by Paper Tiger


http://www.nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3593401&thesection=business&thesubsection=energy&thesecondsubsection=general&thetickercode=
[The messing about at the trust may impede vectors ability to bid for NGC, many companies interested in AGL's stake and closing date for offers 6-Oct].

Will Vector bid?
Will all the mucking around at the court preclude this?
Does it really matter?
Does anyone care anymore?
Where's the bottle gone?



Seems to me there is a lot of bottle being shown and some are fighting hard to see this one come through.

[Snow Leopard]

quote:
AGL agrees to sell Vector its share of NGC

11.10.2004
9.45am
The Australian Gas Light Company (AGL) has agreed to sell its 66.05 per cent stake in gas pipelines company NGC to Vector.

Vector Chairman Michael Stiassny announced the agreement today.

The deal is worth $877.4 million in total with AGL agreeing to accept $3.00 a share. NGC shares traded on Friday at $3.06.

Mr Stiassny said the purchase of a stake in NGC was a major achievement for the company, and was consistent with Vector's long term strategy for growth as an owner and manager of critical infrastructure assets.

"The purchase of a majority shareholding in NGC is an exciting step forward for Vector as it provides the company with a number of complementary businesses for its current portfolio.

"The company has a range of high quality assets which will not only enhance Vector's strategic position, but also continue to play a major role in the country's energy industry."

Completion of the acquisition is subject to an exemption being granted by the Takeovers Panel, which would allow AGL to sell its New Zealand holding company (AGL NZ Ltd) to Vector, rather than its NGC shares. This company holds 64.2 per cent of NGC. AGL also directly owns a further 1.8 per cent stake.

An offer is expected to be made to NGC's other shareholders in due course on an equivalent basis.

The offer is also conditional on Commerce Commission approval and an exemption under the Electricity Industry Reform Act (EIRA) in regard to NGC's interest in electricity generation.

Mr Stiassny said the deal was a significant milestone for New Zealand.

"Given recent public debate on foreign ownership, we are pleased to be able to bring another valuable infrastructure asset back under majority New Zealand ownership."

The deal with AGL may see Vector floated on the share market.

- NZPA

[wsheridan]

quote:Originally posted by Lawso

Hope you're right. You're obviously closer to the scene than I am.


seems so :D

[Lawso]

Well done, ws.
I'm saving some pennies for the IPO next year, tho' hopefully as a bondholder I'll get an allocation at a good price.

[wsheridan]

The most interesting thing is that most of the management of Vector wil find life in the truely public arena very tough.... their arrogance will not sit well with NZX strictures. I think it will be fabulous to see a lot more scrutiny of what is one of our largest companies.

Same goes for the Auckland Energu Consumer Trust... their roles as major owner of a listed organisation should lead to a bit more discipline.

I reckon this will ultimately serve as a great example of why such organisations should have at least a partial listing.

For investors, the great thing is that you know they will maximise dividends... after all, Trustees want to be reelected by the people getting the dividends from the AECT.

If you ar looking for a retirement income stream then this will be one of the safest investments around.

[StainlessSteelRat]

quote:Originally posted by wsheridan

If you ar looking for a retirement income stream then this will be one of the safest investments around.

I wonder. I am currently a bondholder, but i am concerned at the amount of debt on their balancesheet. While this will be nullified slightly by selling 25%, there is still a mountain of money owed to the Aussie banks.

My current feeling is to go through the IPO (as both bondholder and Mecury customer) and stag the whole thing.

[wsheridan]

quote:Originally posted by StainlessSteelRat


quote:Originally posted by wsheridan

If you ar looking for a retirement income stream then this will be one of the safest investments around.

I wonder. I am currently a bondholder, but i am concerned at the amount of debt on their balancesheet. While this will be nullified slightly by selling 25%, there is still a mountain of money owed to the Aussie banks.

My current feeling is to go through the IPO (as both bondholder and Mecury customer) and stag the whole thing.


If you go through the IPO then they will use the funds raised to repay debt.... meaning the very concern you had about potential high debt will no longer exist [B)]

[lambton]

quote:Originally posted by StainlessSteelRat


quote:Originally posted by wsheridan

If you ar looking for a retirement income stream then this will be one of the safest investments around.

I wonder. I am currently a bondholder, but i am concerned at the amount of debt on their balancesheet. While this will be nullified slightly by selling 25%, there is still a mountain of money owed to the Aussie banks.

My current feeling is to go through the IPO (as both bondholder and Mecury customer) and stag the whole thing.


Opportunity to participate in Vector thru a preferential bond holder allocation (meaning Bewares, ABC's and other rip off investment Bankers cannot rob us of an entitlement quite so easily this time - but beware they'll be working on ways to steal the pot of gold) is one of the best things to happen to NZ investors since the float of Contact. Buy as many as you can afford and hold em is my advice.

[wsheridan]

abn amro will make a killin.... but that shouldn't surprise given how close they have been to this for many years.


I'm holding onto NGC in expectation of a scrip-based offer in the IPO.

[lambton]

quote:Originally posted by wsheridan

abn amro will make a killin.... but that shouldn't surprise given how close they have been to this for many years.


I'm holding onto NGC in expectation of a scrip-based offer in the IPO.


Good move.

[Drunk_Russian]

Is it worth buying into Vector bonds now?

Do they become more valuable in anticipation of preferential treatment in an IPO?

[StainlessSteelRat]

quote:Originally posted by wsheridan

If you go through the IPO then they will use the funds raised to repay debt.... meaning the very concern you had about potential high debt will no longer exist [B)]


I'm not so sure. VCT has $1.9bn in term liabilities (D/E of 66%), which will increase by $800m if they buy 66% of NGC, or $1.3bn if they achieve a full takeover.

So, D/E ratio will become $2.7bn on assets of $3.7bn (incl 66% of NGC) or $3.2bn on assets of $4.3bn (100% of NGC).

They have stated that they will float 25% (presumably of the total) which will generate either $900m or $1.1bn. If they use all of this to reduce their debt, the D/E will stand at 48% (regardless of the amount of NGC bought).

With investors becoming more "risk averse", especially regarding debt, this will still be a high ratio and one that will bear closer attention, especially given a current return on equity of 6%.

For me, VCT is a salient lesson for those who are fervent proponents of public ownership. They are wallowing under a mountain of debt, and it may well take more than a quick sale of the family jewels to get them on track.

[whatsup]

With the falling in yield of V bonds I assume that the lower they go the more they cost? at what point (price/cost) are they not worth buying? What are/will be the terms of any intitlement to Victor shares, 1 for every 2 bonds held + a 10% discount to the public issue price? after which I suspect that the bonds will head back up to their former price approx 8%, will the whole exercise be still worth it I wonder????

[wsheridan]

I see the Auckland Energy Consumer Trust agm is tomorrow.... is anyone able to go to this?
I'd be interested to see what the fireworks show is like :D

[ananda77]

whatsup:

According to Vector, if the IPO happens, which is very likely, the IPO will most likely happen at the end of 2005, which means a buyer can expect

- 3 more interest payments up to the 15-December-2005

and needs to pay at a current yield of 6.30%

- accrued interests since 15-June-2004 to now
- approx. 6.7% premium on capital
- brokerage

This means that any buyer at the current yield will still be making a small amount of money via interests payments...
but the cream on the cake will be a guaranteed entitlement shares in the IPO at a 2.5% discount...
and a very successful IPO it will be!!

Read: http://www.nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3609001&thesection=business&thesubsection=energy&thesecondsubsection=electricity&thetickercode=

[nelehdine]

Where will CEN shares be by the time that Vector IPO's ... and CEN will pay excellent divs in the meantime !! That 2.5% discount could turn out to be a very expensive carrot !!!

Disc: HOLD CEN

[ananda77]

nelehdine:

We will see...but in terms of pay-out, cen-dividend = 5.60%, while vector bonds still pay 6.3% for the time remaining.

Also remember, successful IPO's can return 30%+ on the day of listing.

[ananda77]

Furthermore:

Imagine your auntie from Russia sends you $50.000 and because you are a very good person, GOD/Godess, in a moment of infinite love, grants you a sure entitlement in Vector shares. The shares are listed at an issue price of $2.50.

20.000 shares = $50.000.

Based on a current yield of 6.3% = approx. $1.10/bond, a bondholder buys

20.000 shares = $44.000

(because of the conversion ratio $0.50 of share for $1.00 of bonds, in order to get 20.000 shares a person needs to hold 40.000 bonds)

Consequence: Any person who thinks Vector shares will take the opportunity now to get them via the bonds.

[Snow Leopard]

quote:
Vector announced today that it has reached an agreement with the Australian Gas Light Company (AGL) to directly purchase its majority stake in NGC Holdings Limited (NGC) at $2.91 per share.

Vector Chairman Michael Stiassny says the company is very pleased with the outcome which he says represents a further milestone in the development of a key, New Zealand focused infrastructure management company.

Vector will now be making a full takeover offer to all NGC shareholders within the timeframes set down by the Takeovers Code. AGL will sell to Vector under this offer.
The offer is still conditional upon gaining approvals from the Commerce Commission.

Beyond the full takeover offer, Mr Stiassny says Vector is looking forward to working with the NGC Board in continuing to successfully deliver leading energy services within the New Zealand market.

Ends



Hoepfully take2 will get past the CC :)

[ananda77]

...in the meantime vector bonds trading at a yield of 6.25% as institutions collect them for the IPO :)

[Snow Leopard]

...and we keep telling the wife we can't move until after the IPO

[Snow Leopard]

[quote]quote:
VCT
23/02/2005
HALFYR

REL: 1505 HRS Vector Limited

HALFYR: VCT: HY to 31/12/2004 $43.321m ($29.293m) +47.9%

CONSOLIDATED OPERATING STATEMENT FOR THE HALF YEAR ENDED 31/12/2004 FOR
LISTED ISSUER: VECTOR LIMITED

Audited NZ$'000

Current Period; (Previous Corresponding Period)

OPERATING REVENUE

Trading revenue 319,111 ; 280,080
Other revenue 26,723 ; 10,268
Total Operating Revenue 345,834 ; 290,348

OPERATING SURPLUS (DEFICIT)
BEFORE TAXATION 74,306 ; 55,569

Less taxation on operating profit (30,164);(26,389)

OPERATING SURPLUS (DEFICIT) AFTER TAX 44,142 ; 29,180

Extraordinary items after tax - ; -

Unrealised net change in value
of investment properties - ; -

NET SURPLUS (DEFICIT) FOR THE PERIOD 44,142 ; 29,180

Net Surplus (Deficit) attributable
to minority interests 821 ; (113)

NET SURPLUS (DEFICIT) ATTRIBUTABLE TO MEMBERS OF THE LISTED ISSUER
43,321 ; 29,293

EPS 14.4 cps 9.8 cps

Interim/Final/Special Dividend: N/A

VECTOR ANNOUNCES STRONG HALF-YEAR PROFIT

Vector today announced an audited net surplus after-tax of $43.3 million for
the six-month period to 31 December 2004, an increase of 47.9% on the
previous corresponding period.

Vector CEO Mark Franklin says the interim result reflects a solid operational
performance across its core businesses.

"The company's result was ahead of expectations and due largely to higher
operational revenue from organic growth, increased volumes on the network due
to unseasonably cold weather and the efficient management of costs over the
six-month period."

Vector's EBITDA for the interim period was $206.5 million compared to $183.2
million for the previous corresponding period - an increase of 12.7%.
Vector's cash from operations also increased by $31.2 million against the
same period last year to $149 million.

A strong building sector saw growth in both connections and volume for
Vector's electricity and gas businesses. Growth was also enhanced on Vector's
gas network by the success of its channel partner programme and the promotion
of gas which has led to increased share in the new building market.

Increased demand for high-speed broadband services resulted in record growth
for Vector Communications. Revenue for the six-month period increased by 48%
on the same period last year while costs remained relatively steady due to an
increased focus on streamlining its network and operational processes.

Vector Chairman Michael Stiassny says one of the highlights of the interim
period was the acquisition of a 66% stake in NGC Holdings Limited (NGC).

"This acquisition was a significant achievement, and was in line with the
company's long-term strategic, operational and growth objectives. NGC has a
portfolio of valuable assets and Vector is looking forward to the benefits it
will bring given NGC's track record as a strong operational performer."

Vector's acquisition of the majority stake in NGC took place near the end of
the interim period, resulting in 18 days of NGC's operations being included
in Vector's six-month result.

The acquisition also saw a significant increase in the size of Vector's
balance sheet, with total assets increasing by $1.7 billion to $4.7 billion.

Despite an intense focus on cost control, Mr Franklin says there were some
increases in expenses due to subsequent operational and growth activity.

"Vector's interim result was impacted by higher operating expenditure,
primarily transmission costs, and additional financing costs. Increased
electricity consumption and peak demand on the networks saw an increase in
Transpower charges and the company also incurred additional costs in other
areas such as local council rates and regulatory expenses."

Vector's net interest costs also rose during the period due to the incre

[rmbbrave]

Don't you think $43m in profit is a little low for a company with $3 billion in assets? That's about 1.4%.

If you owned $3b worth of office buildings you'd be hoping for $300m in profit or 10%.

[Snow Leopard]

Of that $3b only $2.2b is property, plant and equipment and it is a half year result (although the good half).
There is a lot of infrastructure with this game but at least it generally lasts a long time.

PS Contact has $3.9b of pp&e and they acheived $144m for a year.

[wsheridan]

yes, nothing in this result to suggest accumulation of bonds has not been a good strategy :)

[rmbbrave]

quote:Originally posted by Paper Tiger

Of that $3b only $2.2b is property, plant and equipment and it is a half year result (although the good half).
There is a lot of infrastructure with this game but at least it generally lasts a long time.

PS Contact has $3.9b of pp&e and they acheived $144m for a year.


Contact's profit/asset ratio of 3.7% is not very good either.

Do many analysists use a profit/asset ratio to value companies?

[ananda77]

wisheridan:

yes, nothing in this result to suggest accumulation of bonds has not been a good strategy

Yes, at times, even a blind chicken like me finds a grain :)

[Sideshow Bob]

I received a letter yesterday as a bondholder from a company called 'Ross Investments':

Dear Bondholder,

We are writing to you as a bond holder in Vector Ltd.

Ross Investments buys securities in companies and trusts which have financial problems and/or which have a limited market. We also provide small shareholders with a facility to exit their investment economically. Hence wqe are writing to you with an offer to buy all your Capital Bonds in Vector Ltd.

Our offer is 90.5 cents per Capital Bond. Details of the offer are shown below. Upon recipt of your duly signed and dated transfer form, a cheque together with a contract note for the sale with be mailed to you within 5 working days. You will receive the TOTAL amount shown in the box 'Value of this offer'.

In deciding whether to sell, please consider the following:

- Accepting this offer gives you IMMEDIATE CASH which should be TAX FREE to you.
- There are no costs to you eg brokerage/commission, in selling your capital bonds to Ross Investments.
- Your acceptance of the offer will finalise your involvement with Vector (unless you hold a series of bonds.

Etc etc....

Yours sincerely

Robert D Ross
General Manager

I am not considering selling, and wish I had some more - especially if paying 90.5 cents!! I have only got a few - $5K which is currently worth about $5,475 (less commission), which is about a grand better than their offer of $4,525.00.

There is a ready market for these, and they are almost implying that the company is in financial problems. Suppose also banking on the fact holders may not necessarily know about the potential of a partial sharefloat, and likely preferential allocation to bondholders.

I am going to give them a call tomorrow - just hope no little old ladies, or anybody else for that matter, accept the offer! :(

SSB

[rmbbrave]

They tried the same with Brierly Bonds.

Offered to buy them at well below market price - 80 cents or something when they were trading for close to a dollar. Amazingly some people did take up their offer even though they could have sold their bonds for more on the market even after paying brokerage.

In the end my broker sent me a letter saying not to sell to Ross Investments.

[whatsup]

Sounds as Ross Investments is a Nigerian investment scam?

[lambton]

quote:Originally posted by whatsup

Sounds as Ross Investments is a Nigerian investment scam?


Ross crawls out from under an Australian rock every now and again and fleeces little ol ladies and the gullible out of their bonds at below market. He has been admonished many times by NZ authorities. maybe its time he did time [}:)][}:)]
Usually picks on coys that perhaps could be in financial stress Brierley for example earlier on. Picking on Vector wow. I have read the offer that Ross sent to one Vector holder and imo it is tountamount to fraud. The offer suggests Vector either has financial problems (patently untrue as evidenced by the half yearly result to 31/12) or the bonds lack a market (also untrue - looking at the debth of VCT010's there is over 1m sought thru NZX at present at yields ranging from 5.4 to 5.6% pa. This equates to $109.48 per $100.

Come on Vector this guy is giving you a bad name, come on NZ Secys Comm, Commerce Comm and Consumer and any other do good org out there, get on your high horses and bring this guy to justice.
Please don't use slaps with wet bus tickets this time around in the ring with Ross. He needs more than a slap and a tickle before he will desist in trying to rob NZ's more vulnerable investors.

[Sideshow Bob]

Where did they get the list of bondholders from? Either from:

- The company itself
- Or Computershare

No doubt they have to pay for it, but they shouldn't give access to lists to a company such as this.

Maybe someone should complain to Fair Go - at least would get publicity about it!! :D

SSB


PS - Didn't get around to giving them a call today.

[Bobby_Fischer]

I received his missive and sent it back with a rude note enclosed. I encourage others to do the same - if enough people respond this way it will up the costs of his mailout and be a bit of a pain to his office staff. Who knows, might even deter future campaigns?

[lambton]

quote:Originally posted by Bobby_Fischer

I received his missive and sent it back with a rude note enclosed. I encourage others to do the same - if enough people respond this way it will up the costs of his mailout and be a bit of a pain to his office staff. Who knows, might even deter future campaigns?


Sending back the pre-paid envelope with nothing inside is another way to p#ss him off perhaps.

[rmbbrave]

Vector attacks bond Scavenge

08.03.05
By Chris Daniels


Investment Scavenger�EBob Ross is back in town, this time offering Vector capital bondholders the deal of a lifetime - sell him nearly $11,000 of bonds and get paid about $9000.

Auckland-based energy network company Vector is angry at the way its bondholders have been approached by the Australian, saying names and addresses should not be available for such purposes.

A retired dentist based in Bendigo, Victoria, Ross has come under fire for making similar offers over the past few years.

He was warned by the Commerce Commission in June 2003 that a similar offer he made to BIL International investors to buy debt securities was misleading and deceptive.

There is nothing illegal about offering bond or shareholders below-market prices, but the commission is interested in Ross because of the possibility his unsolicited letters may breach the Fair Trading Act.

The letter to bondholders stated: "Ross Investments buys securities in companies and trusts which have financial problems and/or which have a limited market."

Vector said the letter was "inappropriate and misleading" and implied financial problems.

"It is unfortunate organisations such as Ross Investments are legally able to gain access to such databases and use them in this way," it said.

"Vector has referred the matter to the appropriate regulatory authorities and strongly recommends that all bondholders who receive the letter do not accept the offer before seeking independent advice."

Ross told the Business Herald yesterday that he was not implying there was any trouble at Vector. Ross Investments "normally" targeted firms in financial difficulty or struggling - which did not mean Vector.

The company had been in business for 16 years, often buying from people who were "winding up" estates and who might not know a broker. Brokers often required extra paperwork and could not be bothered dealing with small parcels.

Ross Investments would pay money quicker than brokers and was good value for those with small holdings, he said. "It's a reasonable price," Ross said.

Direct Broking director David Speight made a complaint to the commission about the offer Ross made last year to Kiwi Income Property Trust unit holders.

Speight said Ross was again making misleading claims in letters to Vector bondholders. It was not true there was limited market for the bonds, as $7.87 million had changed hands since February 28.

Ross was offering $9050 for 10,000 bonds. Speight said a client selling the same amount through Direct Broking would pay $54.75 brokerage, but end up with $10,894 for their efforts.

"There's wall-to-wall buyers and no sellers," he said.

Vector bonds, while paying 9.75 per cent interest, also carry preferential rights in the company’s looming partial privatisation and initial public offering of shares.

Leading share and bond registry Computershare has asked the Securities Commission to investigate a law change, so names and addresses of bondholders do not have to be provided to companies such as Ross Investments.

Securities Act law covers the sale of bonds and shares, but has no control over what happens when they are later traded. A new securities legislation bill before Parliaments Commerce Select Committee will cover general "dealing misconduct".

[rmbbrave]

Trust threatens to unplug Vector float

26.03.05
By PAUL PANCKHURST


Energy giant Vector's share float - the biggest planned for New Zealand in 2005 - may be killed by the company's owner, the Auckland Energy Consumers Trust.

Vector's management and board are committed to a float of 24.9 per cent of the company after spending $880 million last year on a 66 per cent stake in gas transmission and distribution company NGC.

However, the trust is poised to appoint an investment bank to assess alternative fundraising deals, including a proposal from an Australian company that invests in energy assets, DUET (Diversified Utility and Energy Trusts).

Tensions are high between the trust and the growth-hungry company that it owns. The trust itself - famously dysfunctional - also appears to be split into two factions.

New Zealand's largest consumer trust represents the 290,000 consumers in Auckland City, Manukau City and parts of Papakura who share Vector's profits via credits on their power bills.

Vector is a big business. It delivers electricity and gas in the Auckland and Wellington regions and has assets of $4.76 billion and debt of $3.1 billion.

Vector's board includes chairman Michael Stiassny (Ferrier Hodgson), Tony Gibbs (Guinness Peat Group), Greg Muir (Pumpkin Patch) and John Goulter (former managing director of Auckland Airport).

A source said some trustees were "trying to backtrack" on an initial public offering of shares expected in the third quarter of this year.

"The trust are fighting among themselves about whether there should be an IPO or a private equity deal."

A financial markets source said a deal with DUET would involve a split of Vector assets - with the trust retaining the Auckland assets - and a joint management company. DUET is managed by Macquarie Bank and AMP Capital.

DUET is believed to have shown an interest last year in Australian Gas Light's 66 per cent stake in New Zealand gas company NGC - the stake later bought by Vector.

It is understood DUET is not the only party interested in a deal.

One of the trustees, John Collinge, said the trust was divided between trustees backing a float "at any cost" and those with open minds.

Sharemarket investors had thought the float a certainty.

The notion of alternatives contrasts with trust chairman Warren Kyd's statement on November 3, when he "confirmed the public offering will take place in the next 12 months".

But Kyd now says: "The original transaction" - he would not spell out what that meant - "did require us to look at alternatives."

Vector sold $354 million of PIPES - pre-IPO equity securities - and raised $526 million of senior debt to buy the stake in NGC.

Vector's financial adviser, investment bank ABN Amro, holds the PIPES, which convert into ordinary shares if the money is not repaid by December 13. That would mean ABN Amro would own a chunk of Vector.

Vector's six-month report said the money must be repaid "from the proceeds of an IPO".

The five people on the consumer trust are: Kyd, deputy chairman Shale Chambers, Michael Buczkowski, Collinge and Karen Sherry. Four of the five were elected on the Auckland Citizens & Ratepayers Now ticket, which supported partial privatisation under certain conditions.

However, the four fell out, with Collinge and Buczkowski opposing a float and Kyd and Sherry supporting one.

The fifth trustee, Chambers, was elected on a no-privatisation platform.

Last year, Kyd went to the High Court to have Collinge barred from a trust vote that could have blocked Vector's plans to buy the NGC stake and then float on the sharemarket.

A judge ruled Collinge had a conflict of interest because of his family's ownership of $200,000 of Vector bonds. (Collinge still has the interest in the bonds.)

Kyd used his casting vote to give the plans the green light.

[shasta]

If Vector do not float soon via an IPO, then the NZX has been grossly misled, as has NGC shareholders.

Not too mention VCT have gone too far down the road incurring massive debt etc.

It still remains such a redundant structure & the Trust had better get used to public scrunity, i would image those opposed to it will be replaced by trustees in favour, should they decide to derail this.

Hold NGC & will do until i receive a scrip offer from Vector, anything less and VCT will never get 90% of NGC.

[Dazza]

the trust is a waste of time IMO.

its been ages since this topic has been told, i mean just get the thing IPO'ed -_-

i mean trust members taking each other to court -_-

[rmbbrave]

Vector silent on sharemarket listing - or not

30.03.05
By CHRIS DANIELS


Energy network company Vector is keeping mum on news that its only shareholder, the Auckland Energy Consumer Trust, is exploring ways to avoid a sharemarket listing.

Vector’s corporate bonds - which carry preferential rights in any share float - fell in price yesterday, their yields rising to more than 5 per cent.

Despite both company and trust saying a sharemarket listing will take place before the end of the year, the trust is about to appoint an investment bank to assess alternative fundraising deals.

These include a proposal from an Australian company that invests in energy assets, Duet (Diversified Utility and Energy Trusts).

A Duet spokeswoman said the company did not comment on "market speculation".

The fund has yet to make any investments in New Zealand since listing in Australia last year.

It does, however, say it wants to invest in energy assets on this side of the Tasman.

News of the trust investigating float alternatives, first reported in the Weekend Herald, has triggered a fall in the popularity of its corporate bonds.

Direct Broking director David Speight said the news had "definitely had an impact".

The previous price premium that was in the market before, based on the expectation of a float, was not there.

[rmbbrave]

Crunch time for share float as Vector and trust meet

13.04.05
By PAUL PANCKHURST


It is crunch time for the biggest sharemarket float planned for this year - the $550 million to $650 million initial public offering by energy giant Vector.

The company's owner, the Auckland Energy Consumers Trust, is due to meet Vector today.

The Business Herald was told the company was "looking for a green light to get cracking with the IPO".

One investment banker said: "My pick is that the IPO will get the green light - but I would be staggered if it was unanimous."

The publicly elected trust has been looking at alternatives to a share float, despite the company's explicit advice that a float is the only commercially sensible option.

One proposal, from Australia's DUET - a listed company managed by Macquarie Bank and AMP Capital - is for the trust to retain 100 per cent ownership of the Auckland electricity network but reduce its ownership of other assets.

Vector's management and board are committed to selling 24.9 per cent of the company in a float after spending $880 million last year on a 66 per cent stake in gas transmission and distribution company NGC.

Only two of the trust's five members - chairman Warren Kyd and Karen Sherry - supported Vector's plans to buy the NGC stake and then float.

One trustee, John Collinge, was blocked from voting because of a conflict of interest and Kyd's casting vote approved the company's plans.

Vector has said that $354 million of PIPES - "pre-IPO equity securities" - from investment bank ABN Amro that helped fund the NGC share purchase must be repaid "from the proceeds of an IPO".

If the money is not repaid by a December or January deadline, the securities convert into ordinary shares and ABN Amro - Vector's financial adviser - will own a chunk of the company, which it would presumably onsell.

The Business Herald was told ABN Amro would get the shares at a significant discount to a market value calculated by looking at similar listed companies.

Vector also faces millions of dollars in penalties via two "step-up" fees to ABN Amro if the PIPES are not repaid quickly enough.

The trust's regular monthly meeting is today and financial market sources say the trust may decide whether to appoint an investment adviser to look at float alternatives.

Kyd and trust executive officer Gary Sturgess refused to comment.

Power play

* Owned by trust representing 290,000 power users.
* Delivers electricity and gas in the Auckland and Wellington regions.
* Has assets of $4.76 billion and debt of $3.1 billion

[Snow Leopard]

It definitely on*


quote:
VCT
13/04/2005
GENERAL

REL: 1750 HRS Vector Limited

GENERAL: VCT: AECT AND VECTOR CONFIRM IPO

The Auckland Energy Consumer Trust (AECT) and Vector Limited are pleased to
confirm that the company will be proceeding with an Initial Public Offering
later this year.

It is expected that the company will list in late August/early September and
will release a prospectus in June.

The IPO will provide AECT beneficiaries with an opportunity to share in the
offer and to also further benefit from the future growth and success of
Vector.

It is also likely that the IPO will contain an offer to minority NGC
shareholders.

AECT chairman Mr Warren Kydd says the Trust is very pleased to be able to
finally end the long-running speculation on Vector's future.

Vector Chairman Michael Stiassny says the company is excited about its future
and is looking forward to listing later in the year.

ends
End CA:00113998 For:VCT Type:GENERAL Time:2005-04-13:17:50:44


*subject to the usual goings on with the AECT. :)

[Sideshow Bob]

From a bondholder - :D:D:D

[Sideshow Bob]

NGC up 11c today, and the announcement was made at 5.50pm.

Of course just a coincidence!


SSB

[StainlessSteelRat]

quote:Originally posted by Sideshow Bob

NGC up 11c today, and the announcement was made at 5.50pm.

Of course just a coincidence!


And the bond yield was down 0.35% - of course it's all a coincidence. ;)

[Snow Leopard]

AND my latest electricity bill was up 7% [:0]
Co-incidence? maybe.

"It must be Thursday, I could never get the hang of Thursdays"

[rmbbrave]

Vector approves share float

14.04.05
By LIAM DANN


Vector's owners - the Auckland Energy Consumers Trust - have overcome internal differences to approve a sharemarket listing for the giant energy network company.

Vector will list in late August or early September. The initial public offering is expected to raise between $550 million and $650 million - making it the biggest float since Contact Energy in 1999.

Last year Vector flagged the possibility that it might sell as much as 25 per cent of its stock to help fund its $880 million purchase of a controlling stake in gas distributor NGC.

Vector has said that a $354 million loan from investment bank ABN Amro that helped fund the NGC purchase must be repaid "from the proceeds of an IPO". But despite the enthusiasm of the Vector board and management team, only two of the publicly elected trust's five members - chairman Warren Kyd and Karen Sherry - initially backed the idea.

One trustee, John Collinge, was blocked from voting because of a conflict of interest and Kyd's casting vote approved the company's plans.

Yesterday's decision follows weeks of market speculation that the trust was getting cold feet and considering alternatives to the float.

One suggestion was for the trust to retain 100 per cent ownership of the Auckland electricity network but reduce its ownership of other assets.

Last night Kyd said the trust was pleased to be able to "finally end the long-running speculation on Vector's future".

A prospectus will be published in June and Auckland power users - the beneficiaries of the trust - will be given the opportunity to take part in the initial public offering.

It was likely that the IPO would also have an offer to minority NGC shareholders, the company said

[Dazza]

wow..... do i note supply and demand here?
supply = auckland power uses only and ngc maybe :D

rest of the country = wait for the ipo :D

do i note some keen open gains for vector.

*old man is sure buying alot when this comes out... and gonna use both house and business's accounts to accumulate in them?

over sub, for this maybe...

[Sideshow Bob]

Fears of fight for scraps at Vector float
15 April 2005
By MARTA STEEMAN

Institutional investors fear they could be left fighting for the scraps of Vector's $700 million float because a big chunk of the shares may be spoken for when Vector floats in September.


However, the interest of institutional investors may be moderated, analysts say, because Vector's owner, the Auckland Energy Consumers Trust, is seen as dysfunctional and unpredictable.

Up to $400 million Vector shares may be swallowed up by Vector bondholders and 15,000 minority shareholders in NGC Holdings who may be offered an entitlement to buy shares in Vector as part of a takeover offer.

The takeover offer for NGC is expected about the time Vector releases its prospectus later in June for the offer of shares in 25 per cent of the Auckland-based electricity and gas company.

Alliance Capital Management analyst John Norling said he could not recall any company floating and conducting a takeover offer at the same time.

Vector would have to act soon to make an NGC takeover, he said. It might offer NGC shareholders cash and an entitlement to buy Vector shares.

Vector has said "it is likely that the IPO (initial public offering) will contain an offer to minority NGC shareholders" but is not giving any more detail.

J B Were analyst Peter Sigley said existing entitlements to Vector shares by bondholders, and the offering of shares to trust beneficiaries and NGC shareholders, made it likely that a limited number would be available to institutions and other investors.

"It's going to be tight, that's for sure," Mr Sigley said.

Mr Norling said: "The institutions and people outside of Auckland will be left fighting for the scraps."

Vector has also said it will be offering shares to the income beneficiaries of the trust - there are about 260,000 - but it has not spelt out if it is reserving a quantity for them.

Some punters are buying NGC shares in expectation of a takeover offer by Vector. On Wednesday one buyer snapped up 5.5 million. Vector bondholders have entitlement to buy about $153 million worth of Vector shares. They are entitled to buy 50 cents worth of Vector shares for every $1 of bonds they hold at a 5 per cent discount to the issue price.

If Vector applied the same 50c-for-$1 arrangement to NGC shareholders they would be entitled to buy $240 million of Vector shares at current NGC share prices.

Vector chairman Michael Stiassny would not comment on float details. Regarding comments about the scarcity of shares for institutional investors, he said the only clear quantifiable entitlement to shares was that of bondholders.

The float would "evolve fairly quickly. It's a fairly tight timetable", he said.

Mr Norling predicted "in the fullness of time" the trust's shareholding would be diluted to 50.1 per cent because Vector would need to issue more new shares to fund further acquisitions.

[wsheridan]

Well... the bonds have been good and given that they are the only guaranteed way into the float I am feeling happy.

[rmbbrave]

Are bond holders who are not NZ residents entitled to buy shares in the IPO?

Overseas residents often can't buy shares in IPOs so that I why I haven't bought any bonds.

[wsheridan]

quote:Originally posted by rmbbrave

Are bond holders who are not NZ residents entitled to buy shares in the IPO?

Overseas residents often can't buy shares in IPOs so that I why I haven't bought any bonds.


The entitlement is with the bond holder regardless of place of residence

[rmbbrave]

Brian Gaynor: Why the Vector float will be a winner


16.04.05


The long-awaited announcement that Vector will list on the NZX has been greeted with great enthusiasm.

This is understandable because the last three IPOs (initial public offerings) of former publicly owned companies - Contact Energy, Auckland International Airport and Capital Properties - have performed particularly well.

There is a now a widespread view among New Zealand investors that they will get a better deal from New Zealand politicians than offshore private equity funds and other vendors.

When one compares the performance of Contact Energy, Auckland International Airport and Capital Properties with Feltex, Vertex and Frucor this is an astute perception.

Details of the Vector float are sketchy but it will raise between $600 million and $1 billion for a 25 per cent stake. As the accompanying table shows this would place it between Contact Energy and Westpac New Zealand, the country’s largest IPOs since 1999.

The most important point about IPOs is the ability of the issuer to achieve or exceed its profit forecasts. In this regard the recent issues by former publicly owned organisations have been successful.

Contact Energy, which had an IPO at $3.10 a share in 1999, forecast net earnings of $65.5 million for the September 1999 year and achieved $155.4 million (climatic conditions were particularly favourable for its generating activities).

It predicted $78.4 million for the September 2000 year and achieved $97 million (all forecasts in the table are for the last forecast period contained in the prospectus).

The beauty about big floats, particularly Contact Energy and Auckland International Airport, is they are extensively covered by sharebroker analysts. This means that the forecasts are carefully scrutinised and the information flow to prospective investors is extensive and independent.

Investors, particularly individual investors, are far less likely to make major mistakes when all the major broking houses have committed resources to assess an IPO.

Auckland International Airport was another former publicly owned organisation that exceeded its profit forecasts. The company predicted net earnings of $40.9 million for the June 1998 year and achieved $41.1 million then predicted a drop to $35 million for 1999 and reported $42.4 million.

The airport has been one of the market stars as its shares were issued at $1.80 and it has had a capital repayment in 2002 (seven in every 25 shares were cancelled for the payment of $1.80 per cancelled share) and a recent four-for-one share split.

Another advantage of the partial sell down of former publicly owned companies is that they perform much better under the listing model.

Air New Zealand and Tranz Rail are obvious exceptions to this rule but 100 per cent of these entities were sold to private-sector interests who subsequently on-sold shares to investors.

The Crown has also underpriced assets when selling, particularly Contact Energy and Auckland Airport.

Capital Properties exceeded its profit forecast but this was somewhat of an illusion. The company forecast net earnings of $11.3 million for the March 2000 year and achieved $13.1 million.

But the prospectus forecast had no provision for property revaluations. In the 2000 year property values were written down by $19.7 million so the bottom line result was a loss of $6.6 million compared with the pre-revaluation profit of $13.1 million.

AMP NZ Office Trust fell well short of its prospectus forecast, which included a revaluation prediction. The trust forecast a net operating surplus of $32.5 million for the June 1999 year, and achieved $36.1 million, but it had a revaluation loss of $18.9 million compared with a forecast gain of $13.3 million.

AMP NZ Office Trust has never recovered from its poor performance in the 1999 year.

Pumpkin Patch is a completely different story as net earnings are expected to be well ahead of forecast and its share price has more than doubled from

[rmbbrave]

quote:Originally posted by wsheridan


quote:Originally posted by rmbbrave

Are bond holders who are not NZ residents entitled to buy shares in the IPO?

Overseas residents often can't buy shares in IPOs so that I why I haven't bought any bonds.


The entitlement is with the bond holder regardless of place of residence


Thanks very much.

Do you happen to know how many bonds an investor will need in order to buy 1 share?

[Lawso]

I think it's much too early for this, rmbbrave. Such details probably haven't been decided yet, much less announced.

In the capital bond offer in Oct '02, the organising broker said: "Capital Bonds provide holders with an entitlement to an allocation of Ordinary Shares in any future IPO by Vector."

I don't think there's been anything definite said since then. Patience.

[ananda77]

A bond-holder is entitled to buy $.50 of Vector shares for every $1.00 bonds holding. Effectively, if you hold 10 000 bonds one is entitled to buy 5000 shares. That's guaranteed.

[rmbbrave]

quote:Originally posted by ananda77

A bond-holder is entitled to buy $.50 of Vector shares for every $1.00 bonds holding. Effectively, if you hold 10 000 bonds one is entitled to buy 5000 shares. That's guaranteed.




Thanks Ananda,

Could you please tell us where this was announced.

[foodee]

Ananda77
I am aware that bond holder is entitle to 50cents worth of Vector share per bond in the IPO. I didn't know the IPO share price has been announced. Would be grateful if you could confirm.

[ananda77]

rmbbrave:

From the September 2005 prospectus:

[u]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.</u>

Reference of ...a right to buy...in an interview with the CEO:

NZ Herald 12-10-2004 by Chris Daniels

http://www.nzherald.co.nz/index.cfm?ObjectID=3599600


Vector bondholders are also high up the queue for an IPO, with every $1000 of bonds giving the right to buy $500 worth of shares... Stiassny also hinted...

Although this was not an official announcement as such, I think it's as close as we can get at this stage.

[rmbbrave]

Thanks very much.

[Dazza]

mmm yes i also read those 2 artilces over the weekend, vector is def bullish :D

i wonder how much we can get our hands on them mmmmmmmm :D

*not enough capital!!! *

[Sideshow Bob]

Buy some bonds. Based on yield, bonds are worth about $1.11 at present. Next payment has an ex date of 1st of June, for half yearly payment. After IPO coupon will drop back to 8.5%, as there is a 1.25% premium on at present, which is since issue because the IPO hasn't yet come around.

Believe bondholders get 5% discount on offer price.

Otherwise depends on where you are living, as looks like trust benefactors of the AECT are likely to be able to participate. Or otherwise buy some NGC shares (unchanged today, at one stage down 6c).

Yes, indeed - not enough capital!!


SSB

[rmbbrave]

Overseas residnts may not be able to participate in the IPO

I asked the woman I buy bonds from the following question:

Sometimes non-NZ residents are not able to buy shares in IPOs. Do you know if overseas residents will be able to buy Vector shares in the IPO if they are Vector bonds holders?

Here was her reply...

I haven't forgotten your query. Vector investor relations did not have an answer to your query. But as it was very valid, and we foresee this question being asked frequently as we approach the IPO, they have gone back to their legal team for clarification.

[wsheridan]

quote:Originally posted by rmbbrave

Overseas residnts may not be able to participate in the IPO

I asked the woman I buy bonds from the following question:

Sometimes non-NZ residents are not able to buy shares in IPOs. Do you know if overseas residents will be able to buy Vector shares in the IPO if they are Vector bonds holders?

Here was her reply...

I haven't forgotten your query. Vector investor relations did not have an answer to your query. But as it was very valid, and we foresee this question being asked frequently as we approach the IPO, they have gone back to their legal team for clarification.



Given the bonds are already held by some people overseas I believe it impossible to stop participation in the ordinary shares ..... can you imagine the signal this gives to overseas investors in our market ... even so.... it will be very easy and cheap to put the bonds in a local shelf company

[Dubdee]

My guess is that non residents will not be able to participate in the IPO as the offer document will not comply with overseas securities laws and there is no way Vector will want to file with ASCI of SEc to get compliance given the expnese and likley limited interest. However you can buy secondary or you can get some local to warehouse them for you. Suggest you use your broker's nominee account.

[Snow Leopard]

from stuff.co.nz


quote:
Vector's float a broking bonanza
10 May 2005

initial jostling is over for the spoils of the share float of Auckland energy giant Vector - New Zealand's biggest initial public offering since Contact Energy in 1999.


The booty for sharebroking firms is likely to be 2 to 2.5 per cent of the $550 to $650 million expected to be raised by selling 24.9 per cent of Vector - $11 million to $16.25 million.

Two firms look set to get the biggest shares.

It is understood that Goldman Sachs JBWere will take a leading role, as adviser to Auckland energy giant Vector and its owner, the Auckland Energy Consumers Trust.

That will surprise some, as Goldman Sachs was the adviser to gas company NGC when majority shareholder Australian Gas Light put its 66 per cent stake in NGC on the block last year.

That was the stake bought by Vector for $880 million.

It was also understood ABN Amro, the investment bank that advised Vector and part-funded the buy, would be the lead manager for the float.

Neither appointment is yet formal - but insiders suggest done deals.

A source said pitches for at least two co-manager roles were likely soon.

A prospectus is to be registered in late June and the company may list in August.

Under the terms of ABN Amro's financing, Vector would face a penalty fee - believed to be $8.8 million - if it failed to float and then repay ABN Amro by mid-October.

The share offer is expected to be in stages to three key groups: the Auckland power users who are the beneficiaries of the consumers' trust; Vector bondholders; and minority shareholders in NGC.

NGC shareholders will be offered Vector shares for their own as part of Vector's efforts to secure full ownership of NGC.

"There is unlikely to be a public pool," a source said.

[Snow Leopard]

IPO documents start to roll [:p]


quote:
VCT
19/05/2005
GENERAL

REL: 1522 HRS Vector Limited

GENERAL: VCT: Pre-registration of interest in Vector share offer

Auckland Energy Consumer Trust (AECT) Beneficiaries* are being given the
opportunity to pre-register their interest in buying Vector shares.

Vector is considering making an offer of shares to the public of up to 24.9%
of the company.

Over the next week, AECT beneficiaries will receive a letter and
pre-registration form which gives them the opportunity to indicate their
preliminary interest in buying Vector shares from a priority pool that will
be set aside for them.

The minimum investment in Vector shares from the AECT beneficiary priority
pool will be $500.

To qualify to indicate their preliminary interest in buying Vector shares
from the AECT beneficiary priority pool, potential investors need to be an
AECT beneficiary as at 1 May 2005 (see additional beneficiary definition in
the 'Notes' section below).

Vector reserves the right not to proceed with the sale of shares, and also
reserves the right to accept or reject any application for shares for any
reason, and may in its absolute discretion scale excess applications on
whatever basis it selects. If the total applications from AECT beneficiaries
exceed the total pool of shares set aside for this purpose, then Vector will
give priority to applicants who have registered their interest, and may
reject applications from those who have not.

Those AECT beneficiaries who complete and return the pre-registration form
will be sent an Investment Statement (including application form) in late
June. They will also be entitled to preferential treatment within the AECT
beneficiary pool.

By pre-registering their interest, AECT beneficiaries will be under no
obligation or commitment of any kind to buy shares, and are not required to
include any money with the pre-registration form. No money is currently
being sought and no applications for shares will be accepted or money
received unless the subscriber has received an Investment Statement.

AECT beneficiaries with one or more properties or electricity accounts will
be entitled to register their interest in respect to each individual account
held if they so choose.

Pre-registration forms for the AECT beneficiary priority pool must be
received by Computershare on behalf of Vector no later than 5:00pm on Friday
10 June 2005.

ends

Notes
* AECT beneficiaries are defined as the named bill payer of an electricity
account on the Vector Electricity network within Auckland City, Manukau City
and parts of the Papakura District
End CA:00115564 For:VCT Type:GENERAL Time:2005-05-19:15:22:58

[Snow Leopard]

This one for bondholders.
Note the frequent references to NZ registered addresses (sorry rmbbrave, ENIGMA and all overseas investors) [V]
[quote]quote:
VCT
19/05/2005
GENERAL

REL: 1600 HRS Vector Limited

GENERAL: VCT: Vector Capital Bondholder Record Date and Pre-registration

On 13 April 2005, Vector Limited ("Vector" or the "Company") confirmed its
intention to proceed with an Initial Public Offering ("IPO") later this year.

The Capital Bonds that the Company has on issue and that are listed on NZDX
have a priority right to subscribe in the IPO for $500 worth of shares for
every whole $1,000 of Principal Amount of Capital Bonds held by the
Bondholder on the Bondholder Identification Date at an issue price of 97.5%
of the issue price paid by other subscribers in the IPO.

To enable the Company to accurately determine the entitlements for Capital
Bondholders, we announce that the following process is being adopted:

1 June 2005: Bondholder Identification Date for the Capital Bondholder
register
Bondholders on the register who have a New Zealand registered address
as at close of business on this date will be sent a Pre-registration Form.
Bondholders who do not have a New Zealand registered address will not be
entitled to pre-register or to the priority subscription right.

2 June 2005: Ex date
The Capital Bonds will trade on an "ex entitlement to the IPO" basis from
this date. The "entitlement to the IPO" will be personal to the holder of
the Capital Bonds with a New Zealand registered address on the Bondholder
Identification Date. It is not transferable to any other party.

3 June 2005: Pre-registration letter and form mailed to Capital
Bondholders
Only Capital Bondholders as at the Bondholder Identification Date who
have a New Zealand registered address are eligible to pre-register their
interest.

22 June 2005: Last date for pre-registration of interest
(the "Record Date")
Capital Bondholders with a New Zealand registered address who were "entitled"
on the Bondholder Identification Date and who wish to be eligible to
subscribe for shares in Vector in the IPO must have submitted their
"Pre-registration of Interest" by this date.

28 June 2005: Entitlement letters mailed to Capital Bondholders
Entitlement letters will be mailed to all eligible Capital
Bondholders who pre-registered their interest prior to the Record Date.

All such eligible Capital Bondholders who complete the "pre-registration"
process will be sent an Investment Statement and Application Form (stating
each Capital Bondholder's entitlement in the IPO) after registration of the
Prospectus. Eligible Bondholders will then be required to submit an
application for shares in the IPO under the terms of issue as set down in the
Investment Statement. The final timetable for the IPO will be advised at a
later date.

Note that Capital Bondholders who do not pre-register by signing and sending
in the Pre-Registration Form will lose any priority right to subscribe for
Vector shares in the IPO. All Capital Bondholders on the register as at the
Bondholder Identification Date who have a New Zealand registered address will
be sent a Pre-Registration Form and instructions as to what to do.

Pre-registration to participate in the IPO will be at no cost to a Capital
Bondholder. No money will be sought and no applications for Vector shares
will be accepted or money received prior to a prospectus for the IPO being
registered in accordance with the Securities Act 1978, the IPO period having
opened and the Capital Bondholder receiving an Investment Statement.

Vector expects to release a prospectus in late June and looks forward to full
participation by Bondholders both in the pre-registration process and the
subsequent IPO.

Yours sincerely

Michael Stiassny
Chairman
End CA:00115566 For:VCT Type:GENERAL

Thank you Paper Tiger this effects me to

[foodee]

I will enjoy the 2.5% discount as well.[:p]

Paper Tiger and others I just hope computershare does not stuff up the address change for just Vector thank you for the official notification. At least this way we know not like MGP where the paperwork just did not arrive.

[Dazza]

yeah i just hope they wont stuff it up
whoeva has theirs could u let us know?
im looking forward to getting mine in the mail :D

[PLK]

hey guys
i am thinking to buy the vector bone for getting their share on IPO
it is VCT010 right
and what is the price for the bond ??
it shows buy yield is 4.4%, so how much does it cost per bond? 4.4cents ?

and how much interest it pay per bond? anyone can help me to know more about vector bond plz. thanks

[Sideshow Bob]

VCT010 Bonds are currently trading for $1.12185. The next interest payment has a record date of the 1st of June (half-year).

$1,000 worth of bonds get you $500 worth of shares. Get a 2.5% discount on shares as a bondholder - yippee!

Coupon rate is 9.75%, but after the IPO this will fall to 8.5%, as there was a bonus 1.25% interest while there wasn't an IPO.

Recently bought a few more bonds. Unsure if it will be worth it, but at least gives a piece of the action if live outside Auckland.


SSB

[rmbbrave]

quote:Originally posted by Paper Tiger

This one for bondholders.
Note the frequent references to NZ registered addresses (sorry rmbbrave, ENIGMA and all overseas investors)


I knew this was going to happen. The way the masturbators at Vector relations refused to give my bond broker a straight answer convinced me they were getting ready to buttfu*k us.

But I have taken steps to ensure that I will be able to buy in the IPO.

That deceitful liar Stainssy will have to get out of bed prety early in the morning to screw yours truly.

[rmbbrave]

quote:Originally posted by PLK

hey guys
i am thinking to buy the vector bone for getting their share on IPO
it is VCT010 right
and what is the price for the bond ??
it shows buy yield is 4.4%, so how much does it cost per bond? 4.4cents ?

and how much interest it pay per bond? anyone can help me to know more about vector bond plz. thanks


The yield of 4.4% is like a companies divided.

The price of the bond is given per 100 for example $102 per 100.

When the bonds are issued they cost $1 each and the yield was 9.75%. Vector shares are in demand now so you will have to part with $108.12 for 100.

See:
http://www.nzx.com/market/security_details/by_security?code=VCT010

[Sideshow Bob]

Hi rmbbrave,


Presume also have to 'pay' for the accured interest from the last record date, as recent trades have been around $1.12.

I just divided daily turnover by bonds traded? Got $1.12, and that is in line with what my last lot cost me.

http://www.nzx.com/market/price_by_stock/securities_a-z?list=V

Good work in making sure taken necessary steps to get involved in the IPO - I'd be p*ssed off too if I was overseas.


SSB

[Lawso]

posted by sideshow bob:

quote: $1,000 worth of bonds get you $500 worth of shares. Get a 2.5% discount on shares as a bondholder - yippee!
Yippee indeed. I'm a $10k bondholder from way back and also a Vector customer, though I imagine the allocation to customers will be minute. Saving up my pennies in the meantime.

[rmbbrave]

quote:Originally posted by Sideshow Bob

Hi rmbbrave,


Presume also have to 'pay' for the accured interest from the last record date, as recent trades have been around $1.12.

I just divided daily turnover by bonds traded? Got $1.12, and that is in line with what my last lot cost me.

http://www.nzx.com/market/price_by_stock/securities_a-z?list=V

Good work in making sure taken necessary steps to get involved in the IPO - I'd be p*ssed off too if I was overseas.


SSB


Yes, you have to buy the accured interest too. But you get that interest so it cancels itself out.

[rmbbrave]

quote:Originally posted by Dazza

yeah i just hope they wont stuff it up
whoeva has theirs could u let us know?
im looking forward to getting mine in the mail :D


My father has got his forms.

The minimum investment is $500 but there seems to be no maximum.

My Dad (the big spender) is keen to buy a $1000 worth so I probably get him to write $41,000 in the space on the form.

[Dazza]

quote:Originally posted by rmbbrave


quote:Originally posted by Dazza

yeah i just hope they wont stuff it up
whoeva has theirs could u let us know?
im looking forward to getting mine in the mail :D


My father has got his forms.

The minimum investment is $500 but there seems to be no maximum.

My Dad (the big spender) is keen to buy a $1000 worth so I probably get him to write $41,000 in the space on the form.


yeah i just got mine too :D
but i dun get what ur saying?

so ur dad is going to buy $1000, and u are going to buy $40000?

or he is going to buy $1000, but because of the tight script, u are inflating it by 40x?

we just got ours, gonna get another one from the shop, gonna try and get $10k worth, so we gonna put $40k initially
when the real one comes out, gonna put 10k on each and see where we go from there..



any predictions?
im tinking gonna rocket?
1. instos cant buy? am i correct?
2. 24.9% only gonna be IPO'ed
3. akl ppl only :D
4. rest wanna/gonna buy it to :D

[rmbbrave]

"so ur dad is going to buy $1000, and u are going to buy $40000?"

Yes that's right. Or at least I going to try to get 40,000 but I'm pretty sure I won't be able to.

[kura]

rmbrave, may pay to spread your bets here, by putting applications in under several different cuzzy bros names for lesser amounts (once alotted simply transfer back to yourself via off market transfer form )

PS: I also give a case of beer as consideration for the service. (keeps everyone happy)

Disc: Had about 20 different applications when AIA floated.

[whatsup]

kura ,where does one get the application forms, I thaught that there was no pool , and that registration of interest letters went out to the account owner at each power users address ?

[kura]

Yes, need to be an account holder, what I meant is that rmbbrave should try picking on several account holders rather than just one (his dad) as my guess is that aplications will eventualy be scaled back.

Most account holders will just fire their registration of interest letters straight into rubbish bins. So it's a matter of rounding up your friends relatives etc, who wouldn't otherwise be using their entitlement.

[Dazza]

kura, where do we get these off market transfer forms from?!

and also... prob is kura.. ur just guessing...

if we do get 20k worth.. *only want 10k*, then we are gonna sell them straight off the block...

*well keep for awhile then sell half*

bit of a risk.. if u get all ur entitlement? and then ur going to stag them on the day?

u say u had 20 diff applications for AIA?
how much did u apply for each of them? and how much did u get in the end? was it more or less what u wanted to get?!

[Lawso]

You can get the necessary form from the share registry - Computershare or BK - if you want to transfer shares to a friend or relative. Just phone and ask for one. Very simple and no charge. I do this from time to time to pass on a few shares to junior relatives.

[StainlessSteelRat]

quote:Originally posted by Sideshow Bob

Coupon rate is 9.75%, but after the IPO this will fall to 8.5%, as there was a bonus 1.25% interest while there wasn't an IPO.


Are you sure that the interest rate drops back to 8.75%? My understanding is that it was increased if the IPO wasn't completed by mid 04 - i don't recall reading anything that said it would drop back to the original coupon if they listed after that.

[PointyHat]

I bought 20,000 bonds for the 95% IPO share cost, then was disappointed to find they were not going to IPO, so I sold them.[:I]
Like some of you Vector users I put down $20,000 as an indication of my interest in the offer form as an account holder. I wish I had put more now.
My guess is that $500 worth is your lot no matter what your interest, the rest will go to the big boys who are ABN clients.
I do hope I'm wrong.I could do with a good piece of this action.

[Sideshow Bob]

quote: Originally posted by SSR

Are you sure that the interest rate drops back to 8.75%? My understanding is that it was increased if the IPO wasn't completed by mid 04 - i don't recall reading anything that said it would drop back to the original coupon if they listed after that.

That is what I was advised by my broker at the time, but don't have the offer document.

Hope they are wrong!!!


SSB

[Dazza]

quote:Originally posted by PointyHat

I bought 20,000 bonds for the 95% IPO share cost, then was disappointed to find they were not going to IPO, so I sold them.[:I]
Like some of you Vector users I put down $20,000 as an indication of my interest in the offer form as an account holder. I wish I had put more now.
My guess is that $500 worth is your lot no matter what your interest, the rest will go to the big boys who are ABN clients.
I do hope I'm wrong.I could do with a good piece of this action.



WHAT 500 BUCKS WORTH!!!
i doubt it? selling it will cost 30 bucks... thats a good 6% of the trade?

surely we could milk out 2k each?

has anyone done the maths?

whats left over afta the bonds/ngc are taken into account for us akl consumers and the instos?

[CJ]

Just a couple of questions:

Has it actually been said that NGC holders are getting an allocation if they sell their shares?

Can you get a pre-register applciation from anywhere or are thy just being posted out. I am trying to locate someone in Auckland to sign on my behalf but fear they might have "filed" the form into the round file already.

Can anyone remember what the allocations were for other high profile IPO's ie AIA, capital properties also restricted didn't they.

What is going to happen post float. there will be a huge demand but assuming they restrict sufficently there will be a huge undersupply - only bond holders will get the amount they want (ie.1/2 there bond amount). Assume all insto will want them and index funds etc etc but no sales, how high can this push short term price before they say it is just to expenseive to buy. Has anyone ever seen a similar situation with no public and insto pool?

CJ

[madmike]

quote:Originally posted by Dazza


quote:Originally posted by PointyHat

I bought 20,000 bonds for the 95% IPO share cost, then was disappointed to find they were not going to IPO, so I sold them.[:I]
Like some of you Vector users I put down $20,000 as an indication of my interest in the offer form as an account holder. I wish I had put more now.
My guess is that $500 worth is your lot no matter what your interest, the rest will go to the big boys who are ABN clients.
I do hope I'm wrong.I could do with a good piece of this action.



WHAT 500 BUCKS WORTH!!!
i doubt it? selling it will cost 30 bucks... thats a good 6% of the trade?

surely we could milk out 2k each?

has anyone done the maths?

whats left over afta the bonds/ngc are taken into account for us akl consumers and the instos?


cnz ipo was scaled to $500...this ipo will be more popular therefore $500 seems all you can expect to get....think cen was the same but i got "3 friends" to apply so got my $2000 worth

[Snow Leopard]

Does anyone know
1) How many $ worth of vector bonds there are?
2) How many AECT beneficiaries there are?

thanks
Paper Tiger

[wsheridan]

quote:Originally posted by Paper Tiger

Does anyone know
1) How many $ worth of vector bonds there are?
2) How many AECT beneficiaries there are?

thanks
Paper Tiger


I believe $307 million in bonds and 290,000 beneficiaries

[Snow Leopard]

Well done :)

So bondholders max IPO stake is $153.5m
If the IPO is worth $600m (low end of any value I have seen) then if the beneficiaries have first dibs on the rest the average is
(600m-153.5m)/290k = $1,540 each.
Of course not every benny will take up their entitlement, so I guess there will be reasonable amounts for those who want it.

Or am I missing something?

[rmbbrave]

I had my Dad apply for $42,500 worth but I told him we'd be lucky to get $5,000. If about a third of Vector customers take up their rights then each should get about $5,000.

[Snow Leopard]

So who are the beneficiaries?
Many of them will have no interest in shares unless the press starts raving about this IPO or the market going up.
Many will not have the money to buy any.
Some will buy some shares but maybe the $500 or or really go for it and apply for $1000.
I think they could be plenty of room for big spenders like you father.

[Sky Tower]

quote:Originally posted by Paper Tiger

So who are the beneficiaries?


Goodness me. The beneficiaries are every power consumer in Vector's original area which includes Central Auckland, South Auckland and parts of Papakura etc. It does not include old United Networks customers in West Auckland and the North Shore. The AECT beneficiaries are only in the original Vector area.

This IPO will be massively scaled backed. I think you will find only the very best clients of ABN Amro will be an allocation - and a very small one at that!

[Snow Leopard]

It was a rhetorical question.
I do not agree with your conclusion ST. Why will it be massively overscribed?

[Sky Tower]

well we'll see
I expect allocations to be scaled to the minimum or something close to the minimum

[kura]

My guess is that will be scaled back to $5,000 per applicant (when I eventually get applications, this is what I will be applying for) Remembering that it is customary to have to attach a cheque on application, and no interest is payable if funds are returned to you due to scaling.

[Dazza]

500 IMO is a joke...

like my dad says... not every one will take their application...

so u say there are 300k?
say only 150k will take it...

i still think PT looks to be the best bet

u could get 1-2k easy IMO

[Dazza]

lol doesnt BS/MINDER/MICK100 et al
reackon that 43 mill that NOG needs to raise is hard?

let alone 450mill + from vector?

saying that the market doesnt have enough cash for this

what BS he is on about.


anwyays ...

madmike, we know what amount u got ie 500 bucks each ..... but how much did u APPLY for???


i mean... so theres 300k households... but what u can bet pretty much alot of them wont have any spare cash at the moment right?
with all those low socio economic ppl in south auckland.... i highly doubt many would subscribe?



anyways, I HEARD NO INSTOS ARE ALLOWED TO BUY IN/???

so why does ABM clients get to?


*feeling we should up the anti on accumulating this be4 the IPO :D*

[madmike]

quote:Originally posted by Dazza

lol doesnt BS/MINDER/MICK100 et al
reackon that 43 mill that NOG needs to raise is hard?

let alone 450mill + from vector?

saying that the market doesnt have enough cash for this

what BS he is on about.


anwyays ...

madmike, we know what amount u got ie 500 bucks each ..... but how much did u APPLY for???


i mean... so theres 300k households... but what u can bet pretty much alot of them wont have any spare cash at the moment right?
with all those low socio economic ppl in south auckland.... i highly doubt many would subscribe?



anyways, I HEARD NO INSTOS ARE ALLOWED TO BUY IN/???

so why does ABM clients get to?


*feeling we should up the anti on accumulating this be4 the IPO :D*


for cnz i applied under my own name and only got $500 worth but for cen i applied in 4 names for $1000 each and got $2000 worth in total.
problem is that all applicants must be vector customers not just anyone, so maybe the allocation will be more...but i think joe public will remember what happened with powernz and what has happened to cen shareprice.........what do they say about gifthorses and their dentures??

[CJ]

quote:what do they say about gifthorses and their dentures??


Never heard that one before. What do they say?[?][?][?]

If more than half the beneficiaries apply, I woudl be very suprised.[:0]

Has anyone confirmed if anyone else can get an allocation?

People have suggested ABN amro customers and NOG holders but I haven't heard that this is the case.

Therefore about $1-2k looks like the amount based on others calcuations.

Disc: still trying to find a Vector customer :(

[madmike]

quote:Originally posted by CJ


quote:what do they say about gifthorses and their dentures??


Never heard that one before. What do they say?[?][?][?]

If more than half the beneficiaries apply, I woudl be very suprised.[:0]

Has anyone confirmed if anyone else can get an allocation?

People have suggested ABN amro customers and NOG holders but I haven't heard that this is the case.

Therefore about $1-2k looks like the amount based on others calcuations.

Disc: still trying to find a Vector customer :(


why else look a gifthorse in the mouth....to look at its teeth!!!
i'll be asking a few people (family,friends,etc)if i can buy thru them.
i'd suspect that a high number of benes would take up this offer.....low risk, good dividend stream, with growth potential...this tsock would be right up their alley

[CJ]

quote: i'd suspect that a high number of benes would take up this offer.....low risk, good dividend stream, with growth potential...this tsock would be right up their alley


What percentage of the NZ population owns shares!!

Most people will weight up $500 vector shares or a new playstation 2.

[foodee]

Looks like computershare could be busy++, with new CSN, off market transfers etc.

[Dazza]

i doubt bene will buy them hahahaha
they dun even have enough money for their kids food..... but seems to have plenty to spend on booze/sky city/cigz

[foodee]

Ah Daz bene might sell their 'rights'............

[Sideshow Bob]

quote: Originally posted by CJ

Most people will weight up $500 vector shares or a new playstation 2.

I think Playstation 3 is just about to come out........

[Snow Leopard]

Vector IPO Flop: Punters Prefer Playstation to Substation

[Snow Leopard]

We are in the news again

quote:from the New Zealand Herald


Investors recruit friends and family to secure Vector stake


27.05.05


by Chris Daniels


A share float in Auckland's electricity network is attracting so much interest that some investors are using their friends and family to get a bigger stake.

Shares in the power lines company Vector are expected to rise in value when the partial privatisation begins later this year.

But only Vector's paying Auckland customers are entitled to the shares - prompting some investors to discuss ways of persuading their relatives to sign up on their behalf.

All 286,000 Vector customers in Auckland City, Manukau City and Papakura were this week sent letters asking for pre-registrations of interest in the upcoming partial float, which is expected to raise between $600 million and $1 billion from mostly small investors.

Market analysts say the market is pointing towards the new shares trading at a 12 per cent premium.

Money raised in the float will be used to pay off debt raised when Vector bought 67 per cent of gas transmission and trading company NGC last year.

NGC shareholders have been promised some kind of special preference in the Vector float, but details have yet to be revealed.

This week's request for pre-registration is Vector's way of gauging the level of interest in the float.

Beneficiaries can ask for a minimum of $500 in shares or more, but fears are rising that its popularity will mean anyone wanting extra will have requests scaled back.

Once the Vector shares are issued, shareholders can do what they like with them, on-selling or transferring ownership. To be accepted into the beneficiary priority pool, the buyer must have an "ICP" number - which identifies every power meter. This means shares will be issued only to names listed on power accounts. People with more than one property can apply for each power account.

Discussion on the ShareTrader website - a chat room for share traders - has this week included methods of getting more shares allocated, by asking friends and family to buy them on behalf of others.

"I'll be asking a few people [family, friends, etc] if I can buy through them," said one trader.

Dividends now paid out annually to all beneficiaries in the Vector home area will continue.

Last year, company chairman Michael Stiassny predicted that the NGC merger would mean a doubling of beneficiary payouts.

The 24.9 per cent privatisation will, however, widen the pool of those getting dividends from what is now the country's biggest energy network company.

Macquarie Equities investment director Arthur Lim said the float had attracted a lot of interest.

There had been a lot of activity recently around Vector's corporate bonds, ownership of which carries preferential rights in the initial public offering and a discounted price. The pricing of these bonds points to a 12 per cent premium for the shares.

Institutional shareholders building a good position in Vector bought up the bonds as a way of getting a decent allocation of shares in the float.

"I think it is going to be a good stock," he said. "A bit like Contact [Energy], to hold for the long haul."

Vector shares

* Vector beneficiaries are being asked to pre-register their interest in Vector shares.

* The company is raising between $600 million and $1 billion in an initial public offering, privatising 24.9 per cent.

* Potential shareholders will then be sent a prospectus late next month and will be able to finalise how many shares they want before sending off a cheque.

* The pre-registration, which carries no obligation to buy the shares, closes on Friday, June 10.

* Beneficiaries are all those with power accounts in the Vector home area: Auckland City, Manukau City and much of Papakura.
</font id="quot

Paper Tiger are you sure you want this share to act like Contact Energy that went backwards for a long period not long after listing. I would certainly love it. Buy in 12 months time for a lot less than float price.

[Snow Leopard]

I don't writes it, I just posts it.

[ananda77]

Are there brokers in New Zealand who trade vectorshares/entitlements at pre-IPO quoted prices??

[small fish]

from memory a lot of stock was given to overseas intstitutions who sold off on listing. Could be a large number doing the same this time round except they will all be kiwis.

[Snow Leopard]

I have had an email from ASB securities

quote:
"We believe this offer will be highly sought after and encourage you to pre-register your interest for this share offer on the form provided by Vector, as it is unlikely that there will be a public pool."

Good to see they read the Herald as well!

[Morpheus]

Kura said:
quote: My guess is that will be scaled back to $5,000 per applicant (when I eventually get applications, this is what I will be applying for) Remembering that it is customary to have to attach a cheque on application, and no interest is payable if funds are returned to you due to scaling.

Does it matter how much you put down on the pre application form? Like if you only put $500 down does that mean you will only get $500 worth when the real form turns up?
Why bother putting 40K down now when the real form is what counts?

[Snow Leopard]

I think the idea is for the managers to gauge how many shares the beneficiaries are likely to want so they can make decisions on allocation to other groups.

[Bobby_Fischer]

Either that or they are trying to set the offer price.

But how can they get a realistic idea of demand without giving an upfront indicative price and prospective earnings info? (perhaps they will?) - anyone with any brains ought to apply for their full entitlement (assuming a cap), then delay a decision until the investment statement comes out, and the managers will be no further ahead, or worse.

Awaiting prereg. documents with interest.

[SueJ]

PaperTiger quoted the Herald -

quote:Discussion on the ShareTrader website - a chat room for share traders - has this week included methods of getting more shares allocated, by asking friends and family to buy them on behalf of others.

"I'll be asking a few people [family, friends, etc] if I can buy through them," said one trader.



You mean only traders post here? I better stop - IRD is always watching! ;)

[zac]

A notice on Direct's website states that Bond holders have received letters from Vector inviting them to register their interest in buying shares in the float (as with Auckland power customers). I would have thought that the Bond holders already had a firm allocation based on the number of bonds held. Have any Bond holders received such a letter?

[Sideshow Bob]

I haven't received anything as yet...........and waiting with anticipation!

[madmike]

quote:Originally posted by SueJ

PaperTiger quoted the Herald -

quote:Discussion on the ShareTrader website - a chat room for share traders - has this week included methods of getting more shares allocated, by asking friends and family to buy them on behalf of others.

"I'll be asking a few people [family, friends, etc] if I can buy through them," said one trader.




You mean only traders post here? I better stop - IRD is always watching! ;)


i'm famous...even the granny listens to me

hey suej...nothing illegal, underhanded, or anything the IRD needs to worry about.
the friends/family/etc that buy for me are entitled to the shares under the offer. hey, just thought, can only one person in the household/per customer apply for the shares or can mum, dad and the three kids all separately apply.
the IRD is only worried about intention. i intend to buy shares solely for their return/dividend so aunty helen can only tax me on that and not the profit on the sale of the shares (which maybe in 6 months or 10 years time)...and oh those people that sold me the "extra" shares sold them to me at cost so aunty helen can tax them as they definitely bought with the intention to resell but unfortunately for uncle cullen the tax on $0 profit always is $0
quote that granny!!!

[Sideshow Bob]

Vector Limited VCT 2 Jun, 2005, 17:24 GENERAL Pre-Registration by Holders of Vector Capital Bonds
Full Text of Announcement
Further to the notice provided to NZX on 19 May 2005, Vector Limited ("Vector") advises that the pre-registration letters and forms are being mailed tomorrow to all holders of Vector Capital Bonds as at close of business on 1 June 2005 who had a registered address in New Zealand.

Copies of the covering letter and pre-registration form that are being mailed to holders of Vector Capital Bonds are available from the NZX on request.

Bondholders should note that:
- the pre-registration process is only available to holders of Vector Capital Bonds with New Zealand registered addresses;

- the pre-registration process only pertains to the Vector Capital Bonds listed on NZDX (under ticker VCT010);

- holders of Capital Bonds may either:
- complete the pre-registration form and mail or fax the form to Computershare Investor Services; or
- instruct their broker or financial adviser to pre-register on their behalf. Forms are being sent to all NZX Primary Market Participants with instructions as to how to complete this pre-registration process on behalf of clients who give such instructions;

Under the terms of the Capital Bonds, the interest rate payable on the outstanding Capital Bonds will be reduced by 1.50% per annum upon Vector becoming listed on the NZSX with shareholders other than the AECT holding 24.9% of the Shares. This reduction will take effect immediately upon this occurring so that, from the day following quotation of the Shares on the NZSX onwards, interest will accrue at the reduced rate and future semi-annual interest payments will be adjusted accordingly.

Capital Bondholders who wish to pre-register must complete and return their pre-registration forms so that they are received by no later than 5:00pm on Wednesday 22 June 2005

Capital Bondholders who do not pre-register by signing and sending in their Pre-Registration Form will lose any priority right to subscribe for Vector shares in the IPO. No money is currently being sought and no applications for Vector shares will be accepted or money received prior to a prospectus for the IPO being registered in accordance with the Securities Act 1978, the IPO period having opened and bondholders receiving an investment statement.

[Sideshow Bob]

Vector Limited VCT 2 Jun, 2005, 17:41 GENERAL Letter to Bondholders
Full Text of Announcement
Dear Bondholder
Pre-registration of interest to exercise your priority entitlement to Vector
Shares
As a Vector Capital Bondholder, you may be aware that Vector is planning to undertake an initial public offering of shares ("IPO") during 2005. Under the terms of the Vector Capital Bond Trust Deed, each holder of Vector Capital Bonds has a priority right to subscribe for ordinary shares issued by Vector, subject to the terms and conditions of the IPO.
The priority subscription right for the IPO is available only to Vector Capital Bondholders who, on closing of the register of Vector Capital Bonds on 1 June 2005, had a New Zealand registered address and who complete and return the attached pre-registration form according to the instructions given below.
On 1 June 2005, you were the registered holder of Vector Capital Bonds and had a New Zealand registered address. Your priority right entitles you to subscribe for ordinary Vector shares with a value equal to $500 for each whole $1,000 face value of Capital Bonds that you held on closing of the register of Vector Capital Bonds on 1 June 2005, at a price of 97.5% of the issue price paid by other subscribers in the IPO.
To exercise your priority right, you are required to complete the pre-registration form attached, and return it in the enclosed pre-addressed envelope, or fax the completed form to Computershare Investor Services Limited on (09) 488 8787. You may also instruct your broker or financial adviser to pre-register on your behalf. In the event that Computershare receives a pre-registration from you, and from someone acting on your behalf, the pre-registration form sent by you will take precedence.
The completed form must be received by no later than 5:00pm on Wednesday, 22 June 2005 Computershare alone shall determine when pre-registration forms have been received.
By registering your interest now, you will be under no obligation of any kind. No money is currently being sought and no applications for Vector shares will be accepted or money received prior to a prospectus for the IPO being registered in
accordance with the Securities Act 1978, the IPO period having opened and your receipt of an investment statement.
You should not decide whether to purchase shares in Vector until you have received a copy of the investment statement which will be sent to you as soon as it becomes available, which is expected to be late June 2005.
Please note that if you do not return this completed form and pre-register your interest by 5:00pm on Wednesday 22 June 2005, your priority entitlement to subscribe for Vector shares in the forthcoming IPO will lapse. If you need advice regarding the contents of this letter, or how to deal with the preregistration form attached, please contact your broker, accountant, financial or legal adviser.
Yours sincerely
Michael Stiassny
Chairman

[Snow Leopard]

quote:from http://www.stuff.co.nz/stuff/0,2106,3300945a13,00.html

Most of $600m Vector float already earmarked
03 June 2005

Less than a sixth of the $600 million being raised in the Vector float will be offered to Mum and Dad investors and pension funds will receive virtually none of the shares, a source says.


The initial public offering in August of a quarter of New Zealand's largest power and gas lines company will be the biggest to hit the stockmarket since the $1.1 billion Contact float in 1999.

Most of it had been allocated to Vector customers, Vector bondholders and NGC minority shareholders, the source involved in the deal told Dow Jones Newswires.

Institutional investors would receive virtually none of the shares on offer and would have to scramble to buy stock on the market after the listing.

The IPO pricing and other details would be announced at the end of this month but the shape of the offering was becoming clear, the source said.

"The size of the IPO is going to be very close to $600 million, if not spot on," he said.

This was in line with most expectations since Vector's owner, the Auckland Energy Consumers Trust, announced the float in April.

Vector would use the proceeds from the IPO to pay for last year's purchase of two-thirds of gas lines company NGC for $877 million.

"The Vector prospectus is likely to be registered in the next three weeks, and the offer should kick off at the beginning of August," the source said.

There wouldn't be a book-build process to set the Vector IPO price, he said. "It will be a fixed price offer and be announced at the end of this month."

About $150 million of the money raised by the IPO will go to Vector bondholders, who have a priority right, according to the source.

Up to $200 million would go to the electricity line company's beneficiaries, he said.

The Auckland trust has more than 290,000 beneficiaries from the former total catchment area of the Auckland Electric Power Board, which became Mercury Energy. Wellington customers of Vector are not beneficiaries and will not receive entitlements in the float.

Another big chunk would go to NGC shareholders through Vector's entitlement offer aimed at acquiring the rest of NGC it did not own, the source said.

Financial institutions such as pension funds would have "virtually no stock" from the IPO.

The public pool, too, was likely to be small.

"Because we are doing the IPO through a range of different entitlement pools and exchanges, there won't be a lot of stock left, hence it is going to be very tight," he said.

"To the extent there's any stock left, it will be offered to the public and it will be less than $100 million."

Vector has more than 640,000 electricity customers, or a third of the New Zealand market.

The purchase of the NGC stake has made it the country's dominant electricity and gas distributor.

[Sideshow Bob]

More info about the re-setting of the bond coupon rate once shares are listed:


Under the terms of the Vector Limited Capital Bonds (VCT010), the interest rate payable on the outstanding Capital Bonds will be reduced by 1.50% per annum upon Vector Limited becoming listed on the NZSX market with shareholders other than the AECT holding 24.9% of the Shares.

To cater for Vector Limited listing on the NZSX market prior to 15 December 2005 and the amended coupon rate, NZX will quote VCT010 using a coupon rate of 8.25%pa.

VCT010 have a current coupon rate of 9.75%pa and the next coupon payment date is 15 December 2005.

Under the terms of the Capital Bonds, interest will accrue at 9.75%pa up to the day of listing and at 8.25%pa thereafter. The coupon payment on 15 December 2005 will therefore be greater than the amount payable at 8.25% by an amount between $0 and $0.75 per $100, depending on the listing date. The FASTER system will not include this extra amount in its bond price calculations.

This calculation method will underestimate the value of the coupon payable on 15 December 2005 and market participants should build the difference into the yield as they see fit.

This new calculation of the coupon rate of 8.25%pa is effective immediately.

NB - Please be aware that the new calculation of 8.25%pa will be used for pricing trades in FASTER settlement but trades in the trading system will still show prices according to the prior calculation of 9.75%pa.

[rmbbrave]

Brokers queuing to join Vector action


07.06.05


By Paul Panckhurst


Sharebroking firms Forsyth Barr, ABN Amro Craigs and First NZ Capital are seeking a piece of the action in New Zealand’s share float of the decade, power lines company Vector.

ABN Amro and Goldman Sachs JBWere already have plum positions in the biggest initial public offering since Contact Energy in 1999. Goldman Sachs is providing strategic advice and ABN Amro is the lead manager for the issue.

The Business Herald was told Forsyth Barr, ABN Amro Craigs and First NZ Capital had all been interviewed for co-manager roles.

ASB Securities is also understood to be seeking a role.

On industry norms, the booty for sharebroking firms is likely to be 2 per cent to 2.5 per cent of the $550 million to $650 million expected to be raised by selling 24.9 per cent of Vector - $11 million to $16.25 million.

The share offer is expected to be in stages to three key groups: the Auckland power users who are the beneficiaries of the consumers�Etrust, Vector bondholders, and minority shareholders in NGC.

NGC shareholders are expected to be offered offered a mix of cash and Vector shares for their NGC stock as part of Vector’s efforts to secure full ownership of NGC. Vector has 67 per cent of the company - bought last year for $877 million.

The share offer will be fixed-price rather than a "book build", the auction method often used to set the price for a share float.

A prospectus is expected to be registered around the end of this month.

Vector has over 640,000 electricity customers and is the country’s dominant electricity and gas distributor.

[whatsup]

Wheres the upside for Vector ? I thaught that it was a reasonably run company at present !
1) If Vector is to be transformed into a cash cow = greater divs for all shareholders then to me it means that the present management isnt/cant be doing their jobs properally/dont have the right commercial expertese in the first place and should therefore be replaced by directors/management who are more savvy!
2) How are the divs to be maxamised so as to drive the share price higher: greater % pay out: greater earnings: retchet up of prices of the present gas supply/line charges :get into "new" products! at what risk.
3)Streamline the present company structure=redundantsees,cost cuttind,lay offs?
4) Although the inclusion into the NZ top 50 will mean that the instos will "have " to hold in order to be competitive with other insots they have guite a while to do so and I would assume that Vector would have to present a great story before the instos head headlong down that path of buying!

[whatsup]

4) If it pays out too much cash to the holders of NGC as part of the takeover then that would put a ceiling on the amount of cash/divs that can be paid to vector sholders in the near future!

[Snow Leopard]

whatsup whatsup? You seem a little bothered.

[whatsup]

No PT just trying to get a handle on NZs biggest float of several years,wheres the upside coming from!!!!

[foodee]

What's up
I thought the prospectus is coming out in 2-3 weeks time!

[rmbbrave]

Has any bond holder recieved their
pre-registration fomrms yet?

[ananda77]

Received bondholder pre-registration forms last Friday. Send them away today via "registered mail".

[Bobby_Fischer]

Received yesterday.

[StainlessSteelRat]

quote:Originally posted by rmbbrave

Has any bond holder recieved their
pre-registration fomrms yet?


Got mine on Saturday, and it was in the post on Monday. :D

[StainlessSteelRat]

quote:Originally posted by whatsup

No PT just trying to get a handle on NZs biggest float of several years,wheres the upside coming from!!!!


It will allow them to reduce some of the substantial debt burden that they incurred as a result of the NGC purchase.

[Jim]

I hold a parcel of NGC shares and I wonder when I will be getting the offer forms ?[8D][8D][8D]

[Snow Leopard]

quote:from Stuff.co.nz (http://www.stuff.co.nz/stuff/0,2106,3307410a13,00.html)


Vector's IPO prospectus expected by month's end
09 June 2005

NGC shareholders have been warned that the current high share price may cause Vector to make only a partial takeover offer for the company.


Vector, as part of a 24.9 per cent privatisation and $600 million share float, is expected to make a takeover offer for the 33 per cent of NGC it does not own.

Money raised in the initial public offering (IPO) will be used to pay down debt incurred last year when Vector bought 66 per cent of NGC.

The Auckland-based energy network company is also offering preference rights in the IPO to its bondholders and its income beneficiaries (anyone with a power account in Auckland City, Manukau City and most of Papakura).

Last year, valuers Grant Samuel said the underlying value of NGC shares was in the range of $2.50 to $2.76.

The shares are now trading around $3.40 each.

Macquarie research predicts a 12 per cent premium for Vector shares upon listing.

It believes Vector is likely to offer about $3.18 for each NGC share, paying half in cash and half in its own shares.

With the premium added, this would take its value up to around the $3.40 mark.

In a research note published yesterday, Credit Suisse First Boston also raised the possibility that Vector would only make a partial takeover - happy to get less than the 90 per cent ownership necessary to take complete ownership.

This would avoid it paying too much for the remaining 33 per cent of shares.

A Dow Jones poll of local institutional investors on Tuesday showed a mixed attitude to the Vector IPO.

Andrew Bascand, at Alliance Capital Management, said it would be of little interest to him because other better growth opportunities - such as Fisher & Paykel Healthcare and Contact Energy - abound.

He said the local regulatory structure and risks of further regulation made Vector a less attractive proposition.

Stephen Walker, head of equities at Walker Asset Management, said "for most institutions it's not something they need to own. If it's at the right price we will buy, otherwise we won't."

However, First NZ Capital research director Barry Lindsay says "there is appetite for lower risk utility companies" and believed the IPO should "go very well".

UBS institutional dealer Campbell Stuart agreed: "I think everyone will have a genuine interest and demand from institutional investors will be strong."

[rmbbrave]

Am I correct in asuming that as soon as you send away your pre-registration form for the shares in the Vector IPO you can then sell your bonds?

How long do you have to hold on to the bonds?

[ananda77]

rmbbrave:

Bonds started to trade -EX- on 3-6-2005. After that date you could sell your bonds and still be entitled to take part in the IPO as well as recieve the June 05 interest payment.

Sold my bonds yesterday as I bought them back in November 04 soleley for the purpose to participate in the IPO.

No profit so far...but no loss either...expect profit from the IPO between 10% and 30%, depending on how successful interested parties are to rubbish the shares (regulation environment etc,etc,etc...).

Kind Regards

[pimpit]

what are the chances of non vector customer getting some shares at the float?

[Snow Leopard]

7th post down on previous page pimpit

[rmbbrave]

quote:Originally posted by pimpit

what are the chances of non vector customer getting some shares at the float?


Zero

[Bling_Bling]

With the high P/E of the other power co and the media, do you think Vector will be over valued in the IPO?

[Snow Leopard]

No

[Dazza]

point is what ppl forget is supply and demand

[whatsup]

bling b----, this isnt a power co its a lines company "H-U-G-E" difference, cant think of another in NZ to benchmark it against.
Once again I ask where will the upside come from apart from inside the company!!!

[Dazza]

its alrite whatsup
the genuis's or so called... they are... think too much ...

i on the other hand, a newbie... expects this float to rocket on the day... simple... demand vs supply here ppl

if it was just for aucklanders, even that is enough to fuel the demand, let alone the whole country!

us aucklanders wont even be able to get our take on it... or what we want, def will be scaled back

[wsheridan]

So does anyone want to start making some punts on offer and listing price?

[metro]

No. I'm happy to let the market determine the listing price.

[foodee]

Wsh
The 'experts' are predicting (guessing) 10-12% premium.
In my case it is irrelevant as I am not a seller.

[Snow Leopard]

I think there are about 300 million Vector shares
(HY profit was $43.321 million and that was an EPS of 14.4cps)

So if the are going to IPO a quarter of them for $600m then that is about $8 a share.

I presume/hope there will a premium on listing but I would assume that this is one to put in the long term portfolio.

[whatsup]

Good article in the 9/06/05 Headliner mag worth a look
Upside to come from strong trading trends, strategic steps ,cost management,,increased energy use due to unseasonable cold winter weather & sustained building sector, overall a company with good growth prospects ,a PE of 18 could be warranted!!!!

[whatsup]

What percentage of the 286,000 house hold owners of power accounts will reply to the registration form ,I'm guessing some where about 15-20 % will actually end up receiving shares in the Vector float which could mean,
1 Greater numbers available to those who apply.
2 A total offer to all holders of NGC shares.
3 A insto pool available to instos.
4 A possible "Public" pool.

[Sky Tower]

Given the number of shares that will be subscribed by AECT beneficiaries, THEN VCT bondholders THEN a possible entitlement for every NGC shareholder THEN allocations to favoured ABN Amro Craigs and GSJBW clients THEN possible firm allocations to other brokers - I see absolutely no possibility of a public pool.

Im happy to be proved wrong though. :)

[Futurz]

quote:Originally posted by Sky Tower

Given the number of shares that will be subscribed by AECT beneficiaries, THEN VCT bondholders THEN a possible entitlement for every NGC shareholder THEN allocations to favoured ABN Amro Craigs and GSJBW clients THEN possible firm allocations to other brokers - I see absolutely no possibility of a public pool.

Im happy to be proved wrong though. :)




You are absolutely right! In fact if you are not a client of Craigs or J B Were you will be pretty unlikely to get any action of substance in this float [V]

[Sky Tower]

Might be time to rebuild some bridges then [:p]

[Futurz]

quote:Originally posted by Sky Tower

Might be time to rebuild some bridges then [:p]


:D I bet you're not the only one calling up their broker for the first time in awhile;)

I'm just glad that I've got some family in Auckland who are happy to take it up on my behalf[8D]

[Sky Tower]

Im not glad I moved from Auckland on March 31st. The cut off date to be an AECT beneficiaries was something like 5th May.
Shame all those people in West Auckland and North Shore who have missed out on account of not being in Vector's "original" area.
:(

[Futurz]

Always going to be people who miss out in these sorts of issues, but would prefer they do it this way rather than a 'free for all' public pool meaning everyone gets a lousy $500. Although thats all I might get through the AECT allocation but better than nothing [8D]

[whatsup]

Sky T----, the good people of Nth Shore & West Auck had their turn several years ago when Power NZ offered shares to power acc holders ,most of whom sold out very quickly ,3-6months before any appreciation in the share price took place .
Share brokers set up Desks in shoping centres to buy shares from the owners who had just been given the shares free ,most of the sales were made around about Xmass- handy Xmass present for most Westies,ready to spend on fast foods and the like!@!!!

[Sky Tower]

Whatsup - when did that happen? I moved to the shore in early 2003 but im thinking it was many many years before that.

[whatsup]

About 12 yrs ago!!

SKY TOWER 1994

[Bullet]

What is the next step with this, I registered my interest, when can we expect the allocations to be done? thanks.

[Lawso]

They haven't told us yet. Next step will be distribution of the prospectus/investment statement, expected "late June". Then people can make their formal applications, and the responses will determine the allocations.

[Bullet]

cheers Lawso.

[whatsup]

NGC slowly rising $4.6 now, does that mean that those punters/buyers of NGC think their situation re vector are looking very good.
Great for the Vector bond holders and upcoming float of Vector :roll on the good /GREAT times!

[whatsup]

So sorry should of been $3.60:still a great opportunity!!!

At what price is it going to be better to take money and run. From NGC

[Bullet]

Are people generally looking at this as a trading opportunity or might the big rewards be over a period of time? Whats everyone think? thanks.

Bullet both A major Stag or a good long term hold

[rmbbrave]

quote:Originally posted by whatsup

NGC slowly rising $4.6 now, does that mean that those punters/buyers of NGC think their situation re vector are looking very good.
Great for the Vector bond holders and upcoming float of Vector :roll on the good /GREAT times!


Is there still any point in holding the bonds now that we have secured the right to buy the shares in the IPO?

[Lawso]

quote:Is there still any point in holding the bonds now that we have secured the right to buy the shares in the IPO?
Will the shares be a stag or a hold or both?? Should one hold on to the bonds? Or sell them after the IPO and buy more shares?? I don't think we can make any decisions until we've seen the prosp. & inv. stat. and until we're told the price of the shares and have worked out how fair the price is - or unfair[?]

[salsanova1]

i am in agreement with lawso ,although i have a gut feeling the price of ngc will dive to around $3.18 after the vector announcement .i'm holding mine, as i am hoping to get onto the vector train ride and if not i don't think ngc will do to bad over time its a good solid prospect

[Bobby_Fischer]

IPO docs available for download right now at: http://www.vectornetworks.co.nz/investor_relations/ipo.php

NB. The full investment statement is a large and s ... l ... o ... w ... download.

[Silly Duffer]

Can someone explain the apparent difference in pricing for offered Vector shares. NGC shareholders have a a value of just over $2.60 abscribed to each Vector share whereas other investors have a value of approx $2.38 or less subcribed. One perspective is that NGC shareholders are getting fewer Vector shares than would have been the case if the value was $2.38 with an higher cash component.Question make sense?

[Sideshow Bob]

quote: Originally posted by Bobby Fischer

IPO docs available for download right now at: http://www.vectornetworks.co.nz/investor_relations/ipo.php

NB. The full investment statement is a large and s ... l ... o ... w ... download.

Tried to download it, but just says empty file!

[Bobby_Fischer]

SB - have just downloaded again here at home - no problemos and much faster this time with all the brokers offline I guess. Perhaps your connection dropped?

[Bobby_Fischer]

quote:Originally posted by Silly Duffer

Can someone explain the apparent difference in pricing for offered Vector shares. NGC shareholders have a a value of just over $2.60 abscribed to each Vector share whereas other investors have a value of approx $2.38 or less subcribed. One perspective is that NGC shareholders are getting fewer Vector shares than would have been the case if the value was $2.38 with an higher cash component.Question make sense?


The way I read it, NGC shareholders will get $2.62 worth of Vector shares (valued at $2.38 per share max) plus $0.78 cash for each NGC share. So assuming Vector SP is set at $2.38 (the max.), for 100 NGC shares you will receive 100*2.62/2.38 = 110 Vector shares and $78 in cash.

[Silly Duffer]

Bobby.... thanks.

[Sideshow Bob]

quote: Originally posted by Bobby Fischer

SB - have just downloaded again here at home - no problemos and much faster this time with all the brokers offline I guess. Perhaps your connection dropped?

Tried again but the same thing happened - connection was OK. Oh well, there is always work tomorrow!! :D

[Tycoon]

I am having problems downloading. If you have pre-registered as a electricity account holder, do you still need to fill in the prospectus?

[rmbbrave]

Big Vector float finally sparking


28.06.05


By Chris Daniels


The country's biggest initial public offering of new shares in six years is finally under way, with energy network company Vector unveiling details of its $593 million float.

Vector has also disclosed its takeover deal for the one-third of NGC it does not already own, saying it will pay $3.40 for each share - 78c in cash and the rest in new shares.

It should be on the stock exchange by spring, with a market capitalisation of up to $2.38 billion.

Less than one quarter of the company is being sold into private hands. The publicly elected Auckland Energy Consumer Trust will stay as owner of 75.1 per cent of the billion shares on issue.

After nearly a day of NGC shares on a trading halt, late trades yesterday sent the shares surging 22c, to close at $3.72 each.

Its shares last traded on Friday at $3.50, below a record high of $3.60 hit on Wednesday last week.

This jump to $3.72, well above the $3.40 a share takeover price, shows what value investors are placing on the Vector shares they will be partially paid in.

Last year, valuers Grant Samuel said the underlying value of NGC shares was in the $2.50 to $2.76 range.

Approval for the sell-off of 24.9 per cent of the company was given by only two of the five trustees, after John Collinge was barred by a court order from voting on the deal. Chairman Warren Kyd later used his casting vote to get the partial privatisation approved.

As owner of 75.1 per cent of Vector, the trust has signed a deal with the company. The board, which will retain final discretion around price increases, has promised to consult the trust before increasing power prices to residential and small commercial customers in its home area.

Although the pool of those getting dividends will now widen to include the new investors, Vector chairman Michael Stiassny says the amount paid out to each beneficiary will double, given the much larger size of the company.

Vector says its dividend policy will be to distribute "all funds surplus to the investment and operating requirements of the company as determined by the board".

The plan

* The float Vector is New Zealand's biggest energy network company, operating in the electricity, gas and telecommunications fields.

* The Auckland Energy Consumer Trust, which is publicly elected, owns Vector. It has decided to partially privatise the company, selling off 24.9 per cent for $593 million.

* New Vector shares will be listed and traded on the stock exchange.

* Money raised will be used to pay down debt incurred when it bought 66 per cent of NGC last year.

* With the float, Vector is launching a takeover offer to buy the rest of NGC.

* It is offering NGC shareholders $3.40 a share. It is paying them 78c in cash, the rest in new Vector shares.

The timetable

* AECT beneficiary offer: opens June 28; closes noon August 10.

* Capital bondholder offer: opens June 28; closes 5pm August 1.

* NGC takeover offer: opens July 11; closes 5pm August 10.

* Public offer: General offer opens June 28.

* Institutional offer opens no earlier than August 10.

* Public offer closes: 5 pm August 24.

* Allotment of shares: from August 25.

* Quotation on the stock exchange and first trading: August 26.

[rmbbrave]

This vector float had better be a roaring success.

I bought 80,000 bonds for $89757 just before the deadline to get shares in the IPO. Received $2378 in interest and sold them for $80842.31.

My current loss is $6536.

I can get get $40,000 worth of shares which will have to rise by 16.3% for me to break even.

What are my chances of breaking even 1 week after listing?

[Bobby_Fischer]

RMB, working backwards from the current NGC SP, you are just in the money.

One NGC share is proxy for 1.1 Vector shares and $0.78. Last sale NGC, as I write, was 3.77, sugggesting Vector will list at (3.77-0.78)/1.1 = 2.72. Your shares (including discount) will cost $2.32 each assuming the strike price is set at the maximum (given demand, every reason to think it will be). So right now your rights are notionally worth 40000 * (2.72/2.32 - 1) = $6,896.

[rmbbrave]

Thanks very much Bobby. That's nice to know.

[Snow Leopard]

rmb, you made a profit on FTB and FTX recently on short term trades so I don't see what you have to moan about. ;)
You can't win them all.

You may have to hold on your shares this time. :)

[rmbbrave]

quote:Originally posted by Paper Tiger

rmb, you made a profit on FTB and FTX recently on short term trades so I don't see what you have to moan about. ;)
You can't win them all.

You may have to hold on your shares this time. :)


I'm not moaning. I was expecting to make a loss on the bonds but I was hoping to make a gain on the shares and be ahead at the end.

Now, Bobby tells me I'm already ahead so I am very happy indeed.

FTB and FTX were only small profits. I am hoping to make thousands on this Vector lark.

I also posted my Vector bond trades as a lot of people said they were going to buy bonds just for the IPO rights. I intended to show those that didn't that they had avoided a substantial risk. I thought I was in danger of making a loss.

However, according to Bobby the Vector bond/share trading is already showing a profit without having completed the share part of the equation.

[Snow Leopard]

rmb: I was applying a degree of sarcasm.
I hope that it works out well for you once the trading actually starts.

Currently reading the Prospectus & Investment Statement: How do people feel about the high level of debt of Vector and the probable NEGATIVE NTA after acquiring more of NGC?

[Bobby_Fischer]

Sorry RMB, but you are back in the red - based on last NGC trade (3.69), your rights are now worth $5,611. NB. Your notional break even price is $3.75.

Should also point out that using the NGC SP as a proxy for the eventual Vector listing price assumes an efficient market and a successful takeover under the current offer (meaning without variation of the offer price).

I think like you PT, this is one to be looked at closely. There has certainly been plently of hype ... So there is likely to be a stampede for shares initially (unless value ascribed to Vector in the NGC target company statement is disappointing), and it may be wisest to sell at that point and buy back later (or not, as the case may be).

[Sideshow Bob]

quote:Originally posted by rmbbrave:

This vector float had better be a roaring success.

I bought 80,000 bonds for $89757 just before the deadline to get shares in the IPO. Received $2378 in interest and sold them for $80842.31.

My current loss is $6536.

I can get get $40,000 worth of shares which will have to rise by 16.3% for me to break even.

What are my chances of breaking even 1 week after listing?

But did you include the 2.5% discount on the issue price for bondholders??

Given this and listing at the offer price, only need an increase of approximately 13.45% to turn a profit! :D

Read somewhere that MacQuarie had predicted a premium of 12% above IPO price on listing.......


SSB

[Dazza]

peeps
post up if u have recieved the prospectus in the mail ok!!

im keen to get mine..

btw will they mail it out though?!

[Sideshow Bob]

Dazza,

Think it only was released yesterday, so might be a few days. You can download it as well if particularly keen - look for the link on Bobby's post on page 10.

Otherwise, here it is:

http://www.vectornetworks.co.nz/investor_relations/ipo.php

Cheers
SSB

[rmbbrave]

Vector users in line for $1375 parcel


29.06.05


By Chris Daniels


Auckland power users should be able to buy at least $1375 worth of Vector shares in the $593 million float.

The Herald understands that demand for the offer mirrors similar public floats, with between 15 and 20 per cent of those entitled to the offer having expressed an interest.

Three pools of potential shareholders are now vying to get their hands on new shares.

NGC shareholders are being allocated $380.4 million from the float, with Vector capital bondholders in line for $153.6 million, leaving $59 million worth of shares for the remaining 286,000 power consumers in Auckland, Manukau and Papakura. Based on the conservative 15 per cent estimate, that equals a parcel of $1375.
But final totals could increase, since all shares not taken up by capital bondholders will be put into the power users' pool.

Meanwhile, Vector is offering a cash and shares deal to NGC shareholders, as it seeks to complete a full takeover of the company. It bought 66 per cent of it last year.

NGC shareholders are being offered $3.40 a share, with 78c in cash, the rest in new Vector shares.

NGC shares closed yesterday at $3.68c, down 4c from the day before.

Analysts are predicting a listing premium of more than 12 per cent.

Vector already has some idea of what sort of interest there is from beneficiaries in buying its new shares, since it asked for "pre-registrations" last month.

The forms were filled out on a "no-obligation" basis and it remains to be seen whether these expressions of interest will translate into actual cheques being written.

Auckland Energy Consumer Trust chairman Warren Kyd said yesterday that the annual dividend payout to beneficiaries was predicted to grow by 60 per cent in 2006, given the larger size of Vector.

[Paddie]

I received my investor statement today.
Offer closes 10th of August with shares expected to be trading on the NZSX on the 26th of August.

Paddie[:p]

[Tycoon]

Does someone have a PDF version of the investment statement that they can email me?

thanks

[Snow Leopard]

Herald Business (http://www.nzherald.co.nz/index.cfm?c_id=3) overdoses on Vector for the weekend with four separate articles.

[OldRider]

I haven't read right back through the thread so hope I'm not regurgitating what has been covered,tell me if I am.

The final Vector price is to be set after an
institutional book build, is this correct?

If so what are institutions bidding for?, the whole issue at this stage seems as if it will be filled, with probably insufficient stock available for what the vector beneficiaries apply for.

Where do the institutions fit in?. How relevant will any bid price be in these circumstances?.

[StainlessSteelRat]

quote:Originally posted by OldRider

The final Vector price is to be set after an
institutional book build, is this correct?


It is the lower of $2.38 or the price set by the institutions.

[Sideshow Bob]

Part of 1 of the articles on Stuff today.


quote:This week's high in the share price of gas company NGC Holdings - $3.90 - implied that Auckland energy giant Vector would list on the sharemarket at a 19 per cent premium.


Or, maybe, it just showed that some people are desperate to get their hands on Vector shares.

The most likely reason the NGC share price has risen is that there are unlikely to be many, if any, Vector shares left for institutional investors after Auckland Electricity Consumer Trust beneficiaries, Vector bondholders, NGC shareholders and stockbrokers get their allocations.

Since Vector is likely to go into several of the major indices that set the benchmarks for institutions' investment performance, many will be loath to not hold Vector shares.

The market has seen the effects of such an index squeeze many times, such as when AMP listed or more recently when Kiwi Income Property Trust went into the MSCI index.

The share price is inflated as institutions jockey for position but falls away once they are set.

NGC shares hit $3.90 on Thursday, against the theoretical $3.40 Vector is offering for the 32.8 per cent of NGC that it does not already own.

Vector will pay 78c in cash and $2.62 in Vector shares for each NGC share.

The nominal price of Vector shares in the company's prospectus is $2.38. A 19 per cent premium would see the shares trading around $2.83.

Even at $2.38, Vector shares are not cheap when compared with those in Contact Energy, a similar company.

Vector's ratio of enterprise value to earnings before interest, tax, depreciation and amortisation (ebitda) is 9.4 times - higher than Contact's price before the Vector prospectus was issued.

Vector's ratio of price-to-earnings before amortisation is 17.7 times, assuming all NGC shareholders accept the offer.

The gross dividend yield is a relatively low 7.2 per cent.

But someone buying NGC shares at $3.90 would end up with a 6 per cent gross dividend yield on their Vector shares.

B*gger - wish I had bought MORE bonds now!! :D:D:D Or NGC a couple of weeks ago at $3.40!

[SueJ]

Excuse me if this has already been covered.

I've pre-booked $20,000 worth of shares as an ordinary AECT beneficiary. From the word in the media and on the group here, I'm only expecting to get c. 1500 shares. Is there any advantage in sending them a cheque for $20,000? If I send them a cheque for $4000, will they scale me down further?

The last time I participated in one of these was for Contact!

[OldRider]

Suej: You have done well out of contact if you still retain, let's hope Vector does even better than this.

Firstly, you have not prebooked any shares, just indicated your interest up to a certain value, and I don't think this confers any right in the future, other than to be included in the application list for the actual allocation. Usually the directors retain the right to allocate shares in an offer like this as they decide.

Probably due to the public interest,
and with a publicly owned enterprise selling I would expect that an equal number of shares will be allocated to all beneficiary applicants,with applications for more than what is available, so none for a public pool.
This may not be so, and larger applicants could get a larger allocation, but I would not expect greatly so.Perhaps just two tiers.

As well, though I have the prospectus to hand I have not read it, but would not expect that the directors will close the issue early, politically not a good idea, but it is not impossible.

All in all I would say if you have the cash consider sending an application for the maximum, and sending it early.

Only the interest this might bring in is lost and this is not a lot compared to the chance of a greater allotment.

[Dazza]

ah i just realised there is a public offer?!!?!?!?

how much do u tink you will be able to get?
and is anyone going to apply via that way?!

[rmbbrave]

quote:Originally posted by Dazza

ah i just realised there is a public offer?!!?!?!?

how much do u tink you will be able to get?
and is anyone going to apply via that way?!


You won't get any that way Dazza.

[OldRider]

Suej:
A further thought, my understanding is that
beneficiary allotments are likely to be around
$1500.00 - so round about 500 shares only

[Lawso]

I'm in much the same boat as SueJ. Have applied for my $5000 entitlement as a bondholder and for $10,000 worth as an AECT beneficiary, but don't expect to get that many. More like about $1350 worth, depending on the number of applications. Vector also sent me - and no doubt others - a third application form, for the Public Offer, but I suspect this would be a waste time. There'll be none left for the public after the beneficiaries, the bondholders, the NGC holders and the instos, I reckon. My broker said he has no allocation for clients.

There'll be no interest payments on money received prior to allotment and I've not read anywhere that applications will be dealt with in the order that they are received so I don't plan to send in any cheques until towards the end of July. Might as well have the interest while the cash is sitting there.

I too wish I'd bought NGC earlier and have toyed with the idea of buying now at the much higher price. One broker is saying Why not? At present prices "all you're doing is paying the first day's stag". But I think I'll wait to buy more Vector after the IPO feeding frenzy has subsided.

Whatever happens, it's good to see a bit of excitement in the NZX, which has been strong but pretty boring so far this year.

[Tycoon]

When would you expect the offer application to be sent to you if you are an AECT beneficiary who has pre-registered?

[haka]

quote:Originally posted by Tycoon

When would you expect the offer application to be sent to you if you are an AECT beneficiary who has pre-registered?


Received mine several days ago.

[Lawso]

If you haven't got yours by now,Tycoon, it looks like you're missing the bus for some reason. You should get on the phone to Computershare.

[Animeart]

Don't worry too much about these subscriptions mate. A mere 3% discount is really not worth the bother. Think big and choose the right time to buy when the share is listed in August. As long as you're in for the long run you shouldn't have to worry about making a decent return. Say 20-50 percent in 5 years is not too ambitious I reckon.

[Tycoon]

thats true.
I rang Computershare, they thought they had sent the application to me but obviously not so will forward it.
Definitely in for the long run!

cheers

[bohemian]

Sunday Star times advertising prospectus for Vector float to general public this morning.Given the allocations already made to existing stake holders is it a waste of time applying through the public pool?

[Steve]

quote:Originally posted by bohemian

Sunday Star times advertising prospectus for Vector float to general public this morning.Given the allocations already made to existing stake holders is it a waste of time applying through the public pool?

Everyone says that it will be a waste of time applying for the public pool, but you never will know until the Fat Lady sings...

[Sky Tower]

Im going to apply for the minimum in the public pool and just see what happens

[warthog]

quote:Originally posted by rmbbrave


quote:Originally posted by Dazza

ah i just realised there is a public offer?!!?!?!?

how much do u tink you will be able to get?
and is anyone going to apply via that way?!


You won't get any that way Dazza.


This is pure speculation. Now, that's not a bad thing in itself, unless you're dressing it up to be fact, which it is not, unless you are certain, in which case we're interested in hearing why you're so sure.

[rmbbrave]

quote:Originally posted by warthog


quote:Originally posted by rmbbrave


quote:Originally posted by Dazza

ah i just realised there is a public offer?!!?!?!?

how much do u tink you will be able to get?
and is anyone going to apply via that way?!


You won't get any that way Dazza.


This is pure speculation. Now, that's not a bad thing in itself, unless you're dressing it up to be fact, which it is not, unless you are certain, in which case we're interested in hearing why you're so sure.


Fair enough. I don't know for sure.

But the public offer will be 4th on the priority list.

1, Bond holders & NGC share holders.
3, Vector customers.
4, Public offer.

Now it has been calculated that customers may recieve less than $1400 worth.

My father, a customer, applied for $45,000 worth.

I strongly believe there won't be enough for customers let alone the public.

[warthog]

quote:Originally posted by rmbbrave
I strongly believe there won't be enough for customers let alone the public.


Fair enough - sounds reasonable.

[rmbbrave]

Key Offer dates

The following timetable is indicative only. Applicants under the AECT Beneficiary Offer, Capital Bondholder Offer, and NGC Takeover Offer are encouraged to submit their applications as early as possible.

Event Key Date

AECT Beneficiary Offer
Opening Date 28 June 2005
Closing Date 12 noon on 10 August 2005

Capital Bondholder Offer
Opening Date 28 June 2005
Closing Date 5:00pm on 1 August 2005

NGC Takeover Offer
Opening Date 11 July 2005
Closing Date 5:00pm on 10 August 2005

Public Offer
General Offer Opening Date 28 June 2005
Institutional Offer Opening Date no earlier than 10 August 2005
Primary Market Participant Offer Opening Date 15 August 2005
Public Offer Closing Date 5:00pm on 24 August 2005

Shares expected to commence trading on NZSX 26 August 2005

Projected interim 2006 dividend payment April 2006

Any Shares not allocated and alloted under the Capital Bondholder Offer and the NGC Takeover Offer will be available for allocation and allotment under the AECT Beneficiary Offer and the Public Offer. The decision to allocate and allot Shares within the AECT Beneficiary Offer and to the Public Offer is at Vector's sole discretion.

Vector reserves the right to change any of the above dates at its sole discretion.

[rmbbrave]

Read this...

[Sky Tower]

Vector investors get tax warning
20 July 2005

Inexperienced investors looking to make a quick buck from the listing of power lines company Vector need to keep their eyes open for the tax man when buying shares, a tax expert warns.


Greg Haddon, senior tax partner at financial services consultant Deloitte's Auckland office, said many investors buy shares under a misconception that gains made after selling them are capital gains and therefore not subject to tax.

Mr Haddon said that although New Zealand does not have a general purpose capital gains tax regime, the Income Tax Act "deems a gain to be taxable where the person acquired the share for the purpose of resale, is a dealer in shares or carried out an undertaking or scheme entered into or devised for the purpose of making a profit".

Mr Haddon said many households may apply for an allocation of shares, intending to sell immediately for a quick gain, unaware the money they make is liable for tax.

He added that the scale of the $593 million Vector listing will attract particular attention from the Inland Revenue Department.

"The Inland Revenue have found the identification of individuals who acquire shares for resale difficult.

"As a result they have not been active in investigating individual share investors," he said.

AdvertisementAdvertisement"However, in a high-profile listing such as this I would not expect the IRD to be complacent."

The IRD confirmed an investor who sold shares one month after purchase could be liable for tax if they bought the shares "with the clear intention of reselling them".

The spokesperson said a long-term investor acquires shares to earn an income from dividends and would be liable for tax on those dividends but usually would not be liable on any profit made from selling the shares.

"It is Inland Revenue's position that any profit derived from the sale of shares by a long-term investor is usually capital in nature and not liable to income tax."

However, it is not the length of time an investor owns a share but rather their intention at the time of purchase that determines their tax liability.

"Inland Revenue would look at a person's trading activities to determine their intention at the point of purchase," the spokesperson said.

[Snow Leopard]

If I was to say that in my opinion this IPO is:

a typical bull-market over-priced sell-off to extract money from institutions and joe public by a management who have cavalierly mortgaged the companies assets to the hilt in a frenzy of ill-considered ego-massaging empire-building.

I guess one or two of you would possibly query my use of hyphenation.


Or to put it another way, there seems to be a blind acceptance that this is a good thing and no-one has really discussed the financials of this company.

[Bilo]

In reply to the other thread but supporting keeping it on one:

The Vector Investment Statement shows VCT at 100% of NGC with borrowings of $2,500M and an annual Interest bill of $230M.

Underlying the Grant Samuel TCS and Vector IS financials is a hugely positive cash flow for VCT. VCT earnings are $580M on revenue of $1,150M. This is more than 50% of revenue. It is potentially a fantastic return on assets. Depreciation and Intangible Asset amortisation are not cash outflows so VCT has a significant opportunity to reduce debt. If we add to that NGC’s gas entitlements, particularly entitlements over the next couple of years including prepaid Maui gas, then cash flows will be massive over the next couple of years.

Grant Samuel used price to earnings multiples to determine value without spelling out the effect that these high cash flows will have on these multiples over a very short time. Vectors share price should appreciate considerably.

A price to earnings ratio of 20 with half the current debt would have Vector shares closer to $5, not $2.38. No prospective cash flows are included in the investment statements (Grant Samuel is consistent with their earlier poor effort in not attempting to value NGC’s gas entitlements) but it would appear that Vector could halve this debt in a couple of years, if they wanted to. Vector shares look like being a very good investment.

NGC at $4.00 is potentially a cheap entry to VCT.

[Snow Leopard]

Plenty of free cash to repay loans, I don't think so.

Firstly, depreciation IS a cash outflow: Investment Statement, Page 24, first column at the bottom.
Any company that suddenly stops capital expenditure is one to avoid.

So the actual cash to play with is $134.8m as stated in the IS.

Unfortunately or fortunately* depending upon your view they have promised a lot of that to the shareholders as dividends namely $53.6m in July 2005 (to AECT) and an interim dividend of $57.4m in April 2006 [Page 25, at the bottom]

So left over is $23.8m

Going forward to 2007 will that improve? Hopefully yes, the tax for 2006 seems rather high for instance. But they are not going to paying down their loans very quickly.

regards

Paper Tiger

*Disc: AECT beneficiary and possible future VCT holder.

[prius]

After last night's revelation by VECTOR that the power crisis for Auckland may be as close as year 2007 rather than earlier thought 2010, what impact do you think this info will have on the IPO as well as in the long run?

[CJ]

Power crisis doesn't effect them as you will still be paying your line rental, even if the power supplier cant get enough electricity down it for you to run your hot water and heaters.

They are a true monopoly as if you want power to your house, and their lines run past your house, you have to use them. Only if you become truely self sufficent can you disconnect.

Forgot to say - the new lines they want build aren't to be paid by them as it is national grid they want built.

Have I got this right.

CJ