Contact boosts cash as most holders keep bonus

Contact boosts cash as most holders opt to keep bonus shares

By Paul McBeth

March 31 – Contact Energy, the largest power company on the NZX 50 Index, said shareholders elected to keep 77% of bonus shares issued in the first half, leaving some NZ$49 million of cash to strengthen its balance sheet.

Under Contact’s profit distribution plan it makes payments to shareholders via a non-taxable bonus shares. Investors who want their payments in cash can elect to have the company buy back the stock at about NZ$5.66 apiece. The shares fell 1% to NZ$5.80 today and are down 16% this year

The result shows that our shareholders want to own more shares in Contact and that they support the investment programme,” said chief executive David Baldwin.

Contact wants to preserve cash as it presses on with plans to increase North Island capacity, including the first phase of the Tauhara geothermal project near Taupo, a 200 megawatt gas-fired power station and an underground natural gas storage facility, both near Stratford. The combined cost of the projects exceeds NZ$500 million.

The company purchased 2.6 million shares of the 11.3 million distributed to shareholders via the bonus issue.
Origin Energy, the company’s majority shareholder with about 51%, increased its holding a further 0.06% after receiving consent under the Overseas Investment Act.

(Businesswire)

© Scoop Media