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Infratil delays $100m bond issue over Opposition power policy

Published: 7:08PM Wednesday April 24, 2013 Source: ONE News

The Opposition's policy to control electricity pricing has forced another big energy player to delay a major fundraising venture.

Investment company Infratil has had to put a $100 million bond sale on hold while it updates prospective investors on possible risks under the Labour-Greens policy.

Infratil planned to start raising $100 million in bonds today.

But as majority owner of electricity generator TrustPower, it has had to put those plans on hold for a few days.

Infratil Executive Tim Brown said it is more of an inconvenience than a major problem.

"But, you know, in a couple of years' time if there is a new government we might be thinking about it slightly differently," he added.

Like Mighty River Power, Infratil is required to inform investors about the potential for the Labour-Greens energy policy to eat into future earnings.

Prime Minister John Key said this shows the Opposition's power policy could be damaging.

"What that shows you is that the Labour and Greens' policy is not only irrational but it actually is potentially doing damage to our companies and to New Zealand workers," Key said.

But Labour deputy leader Grant Robertson said people can see what the policy aims to achieve.

"People are working their way through this policy. They see that what Labour is aiming to do is to create a competitive retail electricity market that we don't have now," Robertson said.

Brown is not averse to looking at ways to cap rising power prices. But he said the Labour-Greens' plan to create a single electricity buyer goes too far.

"It's more philosophically driven than drive by 'this is going to make everybody in New Zealand better off.' And that naturally has to raise concerns which is going to make anybody worried about if they do it with electricity, then what's next?" he said.

Robertson said: "Labour has absolutely no plans to intervene in other markets."

But while markets may have been spooked this week, investors apparently are still keen on the Mighty River Power shares.

One broker told ONE News Political Editor Corin Dann that demand is likely to be strong, albeit with an expectation that shares will be discounted in price.

As for Tim Brown at Infratil, he just hopes to have his bond issue back up and running by the end of the week.