New Zealand government approves Hong Kong power utility takeover

Business Materials 16 July 2008 06:12 (UTC +04:00)

A takeover bid for the Wellington electricity network by Hong Kong's Cheung Kong group was formally approved Wednesday by the New Zealand government, dpa reported.

Finance Minister Michael Cullen said the purchase met all requirements of the Overseas Investment Act, which specifies a "business experience and acumen and financial commitment," to New Zealand.

The bid for the Vector Wellington Electricity Network Limited is in the joint names of Cheung Kong Infrastructure Holdings Limited (CKI) and Hongkong Electric Holdings Limited (HKE).

Cullen said that both companies were part of the Cheung Kong group, which is the largest business conglomerate in Hong Kong with interests in 55 countries, including property, energy, telecommunications and various infrastructure investments.

Auckland-based Vector Limited (VCT), a leading New Zealand energy infrastructure group, announced in April that it was selling its Wellington network to CKI for 785 million New Zealand dollars (about 612 million US dollars).

Earlier this year, the New Zealand government blocked a bid by Canadian interests to take a majority shareholding in Auckland International Airport, the country's main gateway, but Cullen said the sale of the Wellington electricity network did not involve any sensitive land, so overseas investment national interest tests did not apply.

"The hurdle the applicants had to clear was significantly lower," Cullen said.

CKI has significant shareholdings in major electricity networks in two Australian states and a power supply company in Canada.

The Wellington network has had two previous foreign owners, the US company Aquila and Canada's Transalta.