TRANSACT: VCT: Sale of Vector's Kapuni Assets |
10:13a.m. |
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VCT |
03/12/2019 10:13 |
TRANSACT |
NOT PRICE SENSITIVE |
REL: 1013 HRS Vector Limited |
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TRANSACT: VCT: Sale of Vector's Kapuni Assets |
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SALE OF VECTOR'S KAPUNI ASSETS AND ENTRY INTO NEW LONG TERM NATURAL GAS AND |
LPG SUPPLY ARRANGEMENTS |
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Vector has agreed to sell Vector's Kapuni gas treatment plant to Todd |
Petroleum Mining Company Limited ("Todd"). The Kapuni gas treatment plant |
processes all the gas produced from the Kapuni field in South Taranaki. Todd |
holds the licence to extract petroleum products from the Kapuni field and |
owns gas extraction assets for the field on a site adjoining the Kapuni gas |
treatment plant. |
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The transaction resets the relationship between Todd and Vector and creates |
strong alignment in the parties' interests in seeing the Kapuni field further |
developed. New natural gas and LPG supply agreements will provide Vector with |
long term access to these products. |
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On completion of the transaction: |
o Vector will transfer the Kapuni gas treatment plant and associated assets |
it owns to Todd, including its 50% share in the Kapuni Energy Joint Venture |
(an electricity and steam co-generation plant located within the Kapuni gas |
treatment plant) |
o Vector staff at the plant will transition to Todd employment |
o Todd will pay consideration for acquisition of the plant and associated |
assets over the life of the Kapuni field based on a formula that takes into |
account the field production at Kapuni and processing of LPG and other |
products |
o Vector and Todd will terminate the existing Kapuni Gas Contract and enter |
into new long term agreements for the supply of natural gas and LPG from Todd |
to Vector. The new contracts will commence from 2021 with agreed interim |
terms applying between the parties for the supply of natural gas and LPG |
until this time. |
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As part of the transaction, the parties have agreed to settle all current |
litigation related to Kapuni gas as at completion. In the period to |
completion this litigation will be suspended. |
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Vector will receive cashflow over time and the impact to the financials is |
expected to not be material in the short term. Longer term, the amount Vector |
receives for the transaction will vary depending on several factors including |
the amount of reserves in the Kapuni field and the timing of any further |
development of the field by Todd. |
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Completion of the transaction is subject to a number of customary conditions |
including the approval of the Minister of Energy and Resources. Subject to |
meeting these conditions, the transaction is expected to complete in the |
second quarter of 2020. Vector will be working with Todd over the coming |
months to ensure a smooth transition. |
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ENDS |
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Investor contact |
Jason Hollingworth, Chief Financial Officer, Vector |
Jason.hollingworth@vector.co.nz, 021 312 928 |
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About Vector |
Vector is New Zealand's leading network infrastructure company which runs a |
portfolio of businesses delivering energy and communication services to more |
than one million homes and commercial customers across the country. Vector is |
leading the country in creating a new energy future for customers and |
continues to grow and invest in the growth of Auckland, and in a wide range |
of activities and locations. Vector is listed on the New Zealand Stock |
Exchange with ticker symbol VCT. Our majority shareholder, with voting rights |
of 75.1%, is Entrust. For further information, visit www.vector.co.nz |
End CA:00345358 For:VCT Type:TRANSACT Time:2019-12-03 10:13:04 |
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