Infratil has agreed to purchase an additional 4.92% stake in Contact Energy for $437.7 million.
The company acquired the shares from TECT Holdings, previously Tauranga Energy Consumer Trust.
TECT serves as the investment arm of the Tauranga and Western Bay of Plenty’s TECT Community Trust.
The acquisition will be financed through borrowings of $218.8 million and by issuing $218.8 million worth of new Infratil shares to TECT at Friday’s closing price of $12.43 per share.
Infratil’s stake in Contact would increase to 14.3%, up from the 9.4% it obtained after the recent merger of Contact and Manawa Energy.
“TECT’s decision to diversify created a natural opportunity for us to increase our investment in Contact,” he said. “Part-funding with new shares efficiently preserves our flexibility for future growth while increasing ownership of a strong cashflow-generating business,” Infratil chief executive Jason Boyes said.
“We look forward to supporting Contact’s leadership as they drive the combined business forward, and we appreciate TECT’s decision to remain invested in us through Infratil shares.”
TECT’s Chief Executive, Wayne Werder, recognised Infratil and their strong track record.
“We’re delighted to continue this relationship by becoming an Infratil shareholder and will benefit from diversification through their broader infrastructure portfolio.”