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Chinese National Grid Set To Bid For NZ Capital's Power Network

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Fuseworks Media
Fuseworks Media

Wellington, April 8 NZPA - Two Chinese companies are bidding separately for Wellington's power grid, Forbes magazine says.

The two are State Grid Corp -- China's largest electricity distributor -- and Hong Kong-based Cheung Kong Infrastructure Holdings Ltd (CKI), a listed infrastructure company indirectly controlled by tycoon Li Ka-shing.

They are vying to buy the network from Vector Ltd, the largest electricity and gas distributor in New Zealand, which is seeking funds to pay off $US600 million ($NZ763 million) of debt due between this month and October, the magazine said.

The Wellington grid accounts for about 23 percent of Vector's power delivery capability.

State Grid and CKI will file their bids this week, according to the report, and another bidder is expected to be Australia's Westpac and its infrastructure fund Hastings Funds Management.

The winning bid may be over $US1 billion, according to the South China Morning Post.

Vector's biggest assets are its power and gas networks in Auckland, and pipelines delivering natural gas around the North Island.

It hired Goldman Sachs JBWere Ltd last August to manage the Wellington sale after receiving approaches from potential buyers.

"The process regarding the potential sale of the Wellington network is continuing," Vector told the Bloomberg newsagency.

Vector shares were up nearly 6 percent at $1.93.

Its share price fell 42 percent in the year ended March 31, almost three times the decline in the benchmark NZX 50 index, on concern increasing regulation will reduce future earnings.

State Grid will file its bid later this week, the South China Morning Post said.

Initial offers already exceed the company's assessment of an "appropriate value" and a sale was possible in the second quarter, chairman Michael Stiassny said on February 14.

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