Overseas investment decision for case 200810036 - TrustPower Limited

83.0298 percent - New Zealand, New Zealand Public
9.7799 percent - United Kingdom, United Kingdom Public
7.1903 percent - Various, Various overseas persons

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Background to the Investment:
Infratil Limited (through a number of its subsidiaries) holds 50.5326 percent of the shares of TrustPower Limited. Infratil Limited (under its former name, Infrastructure and Utilities NZ Limited), is an overseas person but is New Zealand controlled, and is listed on Schedule 4 of the Overseas Investment Regulations 2005.

Approximately 4 percent of TrustPower's minority shareholders are overseas persons. In addition, one of the Infratil subsidiaries that has a 23.7469% holding in TrustPower Limited (Infratil Energy New Zealand Limited) is an overseas person. This is because Arawata Finance Limited holds a class of shares in Infratil Energy New Zealand Limited. Arawata Finance Limited is an overseas person, as it is a wholly owned subsidiary of the ANZ National Bank Limited. The combined 27.7469% Infratil Energy New Zealand Limited/other minority overseas shareholder ownership makes TrustPower an overseas person under section 12(b)(iii) of the Act.

TrustPower Limited's (TrustPower) core business is to generate and sell electricity. TrustPower currently has a gap between the electricity it generates and the electricity it sells to consumers meaning it is required to purchase electricity to sell to consumers leaving it vulnerable to price movements when hedges are not available, particularly during periods of electricity shortages. The acquisition and/or development of generation assets will reduce TrustPower's potential exposure to electricity price rises.

The Investment:
TrustPower proposes to acquire the subject land as part of the development of the Arnold Valley Hydro-electric Power Scheme (Arnold Valley Scheme), which will comprise a new intake dam, canal, flumes, head pond, regulation pond, and a power station, situated at the Arnold River on the West Coast of the South Island. TrustPower currently owns and operates an existing hydro-electric power station on the Arnold River, which will be decommissioned and demolished following construction of the Arnold Valley Scheme.

Rationale for the Investment:
The relevant land will be used to provide a practical access road into the lower portion of the Arnold Valley Scheme including the discharge pond and discharge gates.
The proposed overseas investment, as part of the Arnold Valley Hydroelectric Power Scheme, is or is likely to benefit New Zealand (or any part of it or group of New Zealanders) having regard to the following factors:

Overseas Investment Act 2005:
s17(2)(a)(i) - Creation/retention of jobs;
s17(2)(a)(iv) - Added market competition, greater efficiency or productivity, or enhanced domestic services;
s17(2)(a)(v) - Additional investment for development purposes;
s17(2)(e) - Walking access;

Overseas Investment Regulations 2005:
r28(e) - Previous investments; and
r28(f) - Advance significant Government policy/strategy.