Blocking of Vector deal 'unlikely'

The Government is unlikely to block a sale of Wellington's electricity network to a foreign party, according to legal sources.

Lines company Vector is understood to have received four final bids for the network - from the State Grid Corporation, owned by the Chinese Government; listed Hong Kong company Cheung Kong Infrastructure; Australia's Hastings Funds Management in partnership with its parent, Westpac; and a fourth party whose identity is unclear.

Last week the Government blocked the Canada Pension Plan Investment Board from becoming a 40 per cent shareholder in Auckland International Airport but two senior mergers and acquisitions lawyers told BusinessDay it was unlikely to take a similar stance on the Wellington network.

The lawyers, who did not wish to be identified, said the Government was unlikely to intervene because, among other reasons, Wellington's electricity network had been foreign-owned before.

From 1994 to 1999 it was owned by Canadian company TransAlta and from 1999 to 2001 by US company Utilicorp.

They also noted that New Zealand's second largest lines company after Vector, Powerco, was owned by Australian-listed company Babcock & Brown.

Finance Minister Michael Cullen approved its sale to foreign interests in 2004. The electricity lines sector was also regulated more heavily than the airports sector, the lawyers said.

- © Fairfax NZ News