Community power trust 'unhappy'
It is regrettable that another community power trust is unhappy at Marlborough Lines' legal action, says Marlborough Electric Power Trust chairman Tim Smit.
However, the Marlborough power trust supported Marlborough Lines in its efforts to get more shares in Horizon Energy, a Bay of Plenty lines company, he said. Marlborough Lines owns 13 per cent of Horizon Energy, and the Eastern Bays Energy Trust owns the remaining shares.
Marlborough Lines has funded a Whakatane iwi's legal action against that trust's 77 per cent share, losing cases at the High and Appeal Courts in Wellington.
Marlborough Lines is waiting for advice and chairman David Dew has not ruled out going to the Supreme Court.
Mr Smit said the power trust supported Marlborough Lines to be a successful company and to improve the business.
"The fact that we have a community trust unhappy at spending money in the process going on is regrettable, but that's the field they are in. It's a publicly owned company."
What was a shame was that Marlborough Lines' history with Horizon had been forgotten and not reported, Mr Smit said.
The Eastern Bay Energy Trust had gone to the market in 1999 to sell down its shares in Horizon, but then they changed their minds, he said.
"Marlborough Lines spent a lot of money doing due diligence and liked what it saw. They did not get the next step . . . the other party changed the playing field."
Mr Smit said that, to date, the legal costs had been covered by the returns on investment from the Horizon shares.
"Where it will go, the company's waiting for legal advice . . . We hold a strategic share, and it will have some value either way."
Marlborough Lines had been successful in investing in other lines companies elsewhere in New Zealand, he said. The company owns OtagoNet and half of Nelson Electricity. "We support the company to be a successful company, and to grow the business . . . We're not getting involved in management of the company."
Meanwhile, the power trust has reviewed the trust's deed and decided to get rid of its five-yearly ownership review. However, a review will be done in future if a written demand was presented by at least 10 per cent of consumers or at the discretion of trustees.
The changes to the trust deed require consultation with consumers and this would start in the next month. Mr Smit said the main change proposed to the trust deed was to do away with the five-year automatic ownership review, and instead to do it at the trust's discretion.
Cost was the main reason, he said. "It's expensive. The ones Marlborough Lines have done are overwhelmingly in favour of the status quo [full community ownership]. That is the trend right across all the trusts across New Zealand. In Marlborough, that's 90 per cent to 100 per cent status quo result."
The trust would not deny the option of having an ownership review, Mr Smit said, but did not think it needed to be done automatically every five years.
- The Marlborough Express