Vector has signed a conditional deal to sell 50 percent of its smart metering business (file picture). Photo: 123RF
The lines company Vector has signed a conditional deal to sell 50 percent of its smart metering business in Australia and New Zealand.
The agreement with Australia's Queenland Investment Corporation (QIC) Private Capital values Vector Metering at $2.51 billion, with Vector expected to net $1.74b once the deal is completed.
Completion is expected in the second quarter of 2023, subject to regulatory approval and confirmation of financing.
Vector chief executive Simon Mackenzie said selecting QIC as its preferred partner would accelerate growth opportunities for the metering business.
"We're very satisfied with the outcome of our strategic review. QIC is a strong long-term partner for Vector Metering, given QIC's scale, experience and breadth of relationships in the New Zealand and Australian energy markets, its access to capital and its shared commitment to growth and customer outcomes," he said.
Vector chair Jonathan Mason said finishing the strategic review represented a significant milestone in its growth strategy.
"Finalisation of the metering joint venture will contribute, over the long term, to the unregulated side of Vector's portfolio, with several reviews underway in Australia that are expected to support an expanding market with accelerated smart meter deployment.
"Upon completion, the board will consider the details of how the proceeds of the sale will be used, however we are committed to reducing overall debt," Mason said.
QIC head of global infrastructure Ross Israel said the agreement demonstrated its commitment to a "thematic-based investment approach".
"We are pleased to reach this important milestone with the largest smart metering platform across Australia and New Zealand with over 2.3 million meters owned or managed across the electricity and gas sectors," Israel said.
QIC and Vector are also in discussions to enter into a strategic alliance with Yurika, owner of a Queensland-based meter business.
The agreement with QIC and Vector is supported by Vector's major shareholder Entrust, and is conditional to consent under the Overseas Investment Act in New Zealand and Foreign Acquisitions and Takeovers Act in Australia, and finalisation of third party financing arrangements.
Vector said a further update on the deal was expected in February when it announced its half year results.
