TRUST POWER

[Jantar]

There is only a single wind/hydro combination in the whole country that is truly complimentary and that is Trustpower's Mahinerangi wind farm and Waipori Hydro group. These two assets share the same 33Kv lines between Waipori No1 station and the switchyard at Waipori Falls. Until Mahinerangi stage 2 is completed it would be a nightmare to try and separate those two assets. In the rest of the country wind and hydro are competitive rather than complimentary despite what the theory says.

[Harvey Specter]

Demerging the wind assets from the hydro assets? Those are meant to be complementary. When the wind blows turn off the hydro tap. When the wind doesn't blow, turn the hydro back on. Taken at face value this proposed demerger makes no sense.

Behind the scenes logic? Infratil are cashed up so as a controlling shareholder they are well placed to support any capital raising required. I wonder if there is something behind the scenes here that Trustpower managment are not telling us? I wonder if Infratil want to sell their stake in Trustpower, but the buyer in the wings doesn't want the 'risky assets'?

SNOOPY

i think the buyer is M&D investors, KiwiSaver etc. Ift doesn't want low growth so it will focus on the new high growth wind co and sell down boring stable hydro yeild co.

[Jantar]

I have been thinking a bit more on this overnight to determine whether I should buy a few TPW shares as it and MRP are the only two electricity gentailers I don't hold.
TPW are the minnow of the big 5 but do hold a larger share of the retail market than their share of generation assets. They are able to get away with this through hedging and having ops and maintenance deals with smaller generators like OWL along with guaranteed power purchase options.

Once they split their assets, it is highly likely that the retail side of their operation would stay with their core company, and this would leave them with much greater risk of being short. It would not be in the interest of the wind side to sell the core business any CFDs as wind makes money by buying hedges, not selling them. Similarly, no company in NZ has ever (yet) made a profit from wind and/or solar alone, and that is unlikely to change for the wind offshoot.

My take on this is that the value of the split companies would be less than the value of the present entire company, and so I shall not buy into TPW in advance of this split. I shall hold IFT as my way of still keeping an interest.

[Snoopy]

Demerging the wind assets from the hydro assets? Those are meant to be complementary. When the wind blows turn off the hydro tap. When the wind doesn't blow, turn the hydro back on. Taken at face value this proposed demerger makes no sense.

Behind the scenes logic? Infratil are cashed up so as a controlling shareholder they are well placed to support any capital raising required. I wonder if there is something behind the scenes here that Trustpower managment are not telling us? I wonder if Infratil want to sell their stake in Trustpower, but the buyer in the wings doesn't want the 'risky assets'?

Another take on the split motive. Maybe the TECT, who still own 27% of the company don't want to finance the windfarm expansion?

SNOOPY

[Harvey Specter]

Another take on the split motive. Maybe the TECT, who still own 27% of the company don't want to finance the windfarm expansion?

SNOOPY

good point. If they are anything like AECT (75% owner of VCT), they will have no other funds, and unless they are willing to dilute, will require expansion to be from free cash flows (and would still require a growing dividend). Maybe then tension between TECT and IFT has caused the split. If the case, why doesn't IFT set up a new co? My money is still on them divesting TPW (or swapping with TECT).

[Hectorplains]

http://www.nbr.co.nz/article/trustpo...costs-b-188408

Good yield but nothing much else to get excited about.

[huxley]

Energy Direct is being merged with the trust power brand.. I guess they'll be trying to leverage their internet offer to the former ED customers... Plus simplify the business..

[artemis]

Good Trustpower presentation from Infratil roadshow here:

https://infratil.com/for-investors/c...presentations/

[Zaphod]

Energy Direct is being merged with the trust power brand.. I guess they'll be trying to leverage their internet offer to the former ED customers... Plus simplify the business..

I think there's far too many retailers in the energy sector relative to the customer base, so further consolidation is inevitable.

[Snow Leopard]

https://nzx.com/files/attachments/245232.pdf

Trustpower delay hiving off their Ozzie Windies as a result of the South Australian Blackout.

The report mentioned can be obtained here (and does not imply anything about wind power in general or Snowtown in particular).

Best Wishes
Paper Tiger