Meridian, New Zealand's largest energy company, is closing its business ventures unit and shortening the leash on its subsidiaries.
In a tidy-up ahead of its planned flotation, chief executive Mark Binns said the unit which had taken Meridian into insulation and alternative heating technology was being closed for financial reasons.
The brain child of former chief executive Keith Turner, the unit spun out a string of companies, although their success had been mixed.
One, Powershop, the online-only retailer, has seen explosive customer growth as it piggy-backed on a state-funded campaign to encourage price comparison. In 2011 it was the fastest growing business in New Zealand and one of the fastest in all of Asia, according to the Deloitte Fast-50.
However, ventures such as RightHouse and WhisperTech were less successful within Meridian, prompting the company to write off $90 million from the businesses in the year to June 30.
Binns said Meridian was looking for other positions for the team of about eight staff, however it was inevitable that some would be made redundant.
While Powershop was considered a success, other ventures had been closed down or sold and Binns said more "rationalisation" was likely in the near term. The financial performance of the businesses had prompted the closure.
"Some of the ventures were not successful in terms of financial returns, so we had to do something about it. Most of the decisions were made for financial reasons."
One investment analyst said the closure appeared to be a continued "tidy-up" of Meridian's business ahead of its possible flotation.
Binns said he was also streamlining the management of Meridian's subsidiaries, which have previously had independent boards. Now each will report directly to him or another Meridian executive.
"I don't like sitting at the top of the tree having subsidiaries run by boards," Binns said.
"I don't want to find out about things after boards have made decisions, given that I'm the one that's going to be held accountable, and carry the can for their performance.
"I prefer to have shorter reporting lines," he said.
- © Fairfax NZ News
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