31 Mar 2000
The directors of Infratil advise that the Company today gave notice to Natural Gas Corporation Holdings Limited requesting that Company, pursuant to sections 110 to 115 of the Companies Act 1993, to purchase Infratil's shares in Natural Gas Corporation. Infratil holds 26.6 million shares in Natural Gas Corporation representing around 6.7% of Natural Gas Corporation's shares.
Infratil is required to announce this transaction in terms of New Zealand Stock Exchange Listing Rule 10.7.4 as the value of the transaction exceeds 10% of Infratil's shareholders funds.
Infratil's right to seek its shares to be purchased by Natural Gas Corporation arises from the protections established in the Companies Act which give a minority shareholder the option of exiting at a "fair and reasonable" price where the minority holder has, by a negative vote, indicated its opposition to a major transaction.
Infratil voted against the special resolutions of Natural Gas Corporation to approve purchase of TransAlta New Zealand Limited at Natural Gas Corporation's special meeting of shareholders held on the 21 March 2000.
Infratil's decision to exercise its rights as a minority shareholder has been taken because it believes that exit at a fair and reasonable price based on Natural Gas Corporation's business value without the TransAlta acquisition is equitable.
Natural Gas Corporation is obliged under sections 110 to 115 to pay Infratil a "fair and reasonable" price for the shares. If Infratil does not accept the price nominated by Natural Gas Corporation, an independent arbitrator will determine the price. Infratil expects that the buy-out price will be in excess of the current Natural Gas Corporation share price.
Infratil's directors consider that the new direction of Natural Gas Corporation no longer fits well with its energy investment strategy and that the option of utilising the minority protection rights was appropriate and warranted and in the best interests of Infratil's shareholders.
Infratil believes that Natural Gas Corporation has performed well as a business and Infratil agrees with the directors of Natural Gas Corporation that its value has been increased by the recently announced gas sales contracts to Petrochem and Genesis. Infratil has decided to exercise its rights as minority investor to exit and lock in that value free of the uncertain value impact associated with the decision by the majority Natural Gas Corporation shareholder to proceed with the purchase of TransAlta.
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