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Sale of Meridian energy business fetches $50m

Last updated 05:00 21/12/2012

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State-owned Meridian Energy has sold one of its subsidiaries for more than $50 million a day after Finance Minister Bill English floated the possibility of putting all three taxpayer-owned power companies on the block next year.

Wellington-based generator Meridian, which owns the Waitaki and Manapouri hydro stations in the South Island, yesterday sold its Energy for Industry (EFI) business to community-owned power company Pioneer Generation.

The price was kept under wraps, but it was put at more than $50m.

It is part of its plan to sell its non-core subsidiaries.

EFI works with large industrial customers who use processed waste fuels to reduce their carbon emissions and overall environmental impacts. That includes setting up woodburners and other waste fuel plants on site and helping manage them.

Meridian Energy chief executive Mark Binns said EFI had become a leader in its field in the 12 years since it was launched.

The size and scope of the company's process heat and biomass infrastructure complemented Pioneer's existing business of generating energy from renewable sources.

Alexandra-based Pioneer runs 12 renewable power stations in Central Otago and Southland on behalf of consumers in the former Otago Central Electric Power Board area. Profits go to a trust which gives grants to community projects.

Pioneer chief executive Fraser Jonker said buying EFI was a big step for the generator.

"The EFI business has a market-leading position in the process heat and biofuel markets with strong opportunities for future growth."

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