17 Oct 2012

Contact welcomes partial sale of state-owned energy firms

7:19 pm on 17 October 2012

Contact Energy will face greater scrutiny with the planned partial privatisation of state-owned power companies, but its chairman is confident his firm will benefit.

The Government plans to sell up to 49% of Mighty River Power by the middle of next year, with Genesis Energy or Meridian to follow by the end of the year, though legal action over water rights may yet delay that timetable.

Contact Energy chairman Grant King told shareholders at the company's annual meeting on Thursday that the partial privatisation plan will put Contact under more scrutiny.

But he says the listings will also provide capital for those companies at a time when the Government is challenged to fund things, which will be positive for continued investment in the industry.

The companies will also be subject to the same financial disciplines as shareholders expect of Contact which Mr King said will be a great basis for competition to occur.

Mr King says he does not believe Contact faces the threat of future claims on water as a result of legal action over water rights.