19 May 2000
Infrastructure & Utilities NZ Limited (Infratil) has been advised by Natural Gas Corporation Holdings Limited (NGC) that it is refusing to pay to it the provisional amount of $34.6 million due today (19 May 2000) in respect of the buy back of 26.6 million of Infratil's shares in NGC.
NGC is required to buy back these shares after Infratil invoked the minority buy-out provisions of the Companies Act 1993.
NGC has advised that it has paid $34.6 million into a trust account for the benefit of Infratil, pending resolution of whether Infratil is obliged to transfer these shares to NGC at this time or when the final purchase price is determined through arbitration. Infratil did not consent or agree to this procedure and has advised NGC accordingly. Infratil offered to place these shares in a security trust arrangement to ensure that NGC would obtain clear title to these shares at the conclusion of the arbitration. This offer was rejected by NGC.
Infratil's view is that section 112 (4) (b) of the Companies Act 1993 is explicit in requiring that the provisional payment be made to it, and has legal advice that failure to make payment to it is a breach of the Act.
It is likely that this matter will be before the High Court within a matter of days.
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