Eastland Group and shareholder Trust Tairāwhiti announce sale of Eastland Network to Firstgas Group, owned by Igneo Infrastructure Partners, for $260 million

  • Firstgas Group (Firstgas), owned by Igneo Infrastructure Partners (Igneo), will buy 100% of Eastland Network for $260m.
  • The asset book value of Eastland Network as at 31 March 2022 was $185m.
  • Upon settlement, the proceeds will be split between Trust Tairāwhiti and Eastland Group.
  • A special distribution of $80m will be provided to Trust Tairāwhiti.
  • Trust Tairāwhiti confirms Igneo meets the best-for-region buyer criteria.
  • The sale remains conditional on OIO approval and is anticipated to be finalised in early 2023.

Eastland Group and its sole shareholder Trust Tairāwhiti have announced the sale of Eastland Network to Firstgas, owned by Igneo Infrastructure Partners, for $260 million. Eastland Network is the electricity lines company for Tairāwhiti and Wairoa, delivering power to nearly 26,000 customers across 12,000 square kilometres.

The proceeds from the sale will be split with sole shareholder Trust Tairāwhiti, which will receive $80 million (made up of a return of $30m of capital notes and a special distribution of $50m), with Eastland Group retaining the balance.

Igneo Infrastructure Partners, part of the First Sentier Investors Group, has been investing in infrastructure for more than 30 years and is one of the leading infrastructure asset managers worldwide. Its investments in New Zealand include Tuatahi First Fibre, along with Firstgas and Waste Management New Zealand, which already service consumers and businesses in the Tairāwhiti region.

Firstgas Group provides the infrastructure to deliver natural gas, and supplies LPG to more than 430,000 Kiwi homes and businesses every day.

The sale of Eastland Network remains conditional on approval from the Overseas Investment Office.

Chair of Eastland Group, Matanuku Mahuika says the network sale to Firstgas for $260 million is an outstanding result.

“This sale marks an exciting time for Tairāwhiti, as it will release significant capital for Eastland Group’s strong pipeline of projects, including local and national renewable energy opportunities, and for a special distribution to Trust Tairāwhiti.

“Firstgas has significant expertise in managing regulated utilities, and is supported by its shareholder Igneo, an experienced infrastructure operator. Importantly, it has the scale and expertise to own Eastland Network so that it can continue to deliver for Tairāwhiti into the future.

“Under Firstgas ownership, the day-to-day operations will remain based in Tairāwhiti, retaining local staff, contractors and expertise. The regulations that apply to Eastland Network mean there are ongoing protections for local consumers around price and quality of supply.”

Chair of Trust Tairāwhiti, John Clarke says Trustees are excited about the opportunities the sale will unlock for Tairāwhiti and its communities.

“From the outset, we said that we would only sell to the right buyer on the right terms to deliver for Tairāwhiti. After careful consideration, Trustees are confident we have selected a high quality buyer with an excellent track record that meets all our criteria. We have made this decision in the best interests of Trust beneficiaries and the company over the long term.

“The sale will release $80 million in funds to the Trust, allowing the Trust to continue to build and diversify its investment portfolio for future generations in Tairāwhiti. It will also allow us to fund more regional projects and facilities, and boost investments in regional economic development.”

Paul Goodeve, CEO of Firstgas, said, “Firstgas Group’s expertise is in the management and operation of regulated utilities. Our expertise in disciplines including project management, regulation and asset management are as applicable to electricity networks as they are to gas pipelines.

“We have a gas distribution network in Gisborne and we are excited about possible opportunities for Firstgas and Eastland to work together across the networks. Working with our shareholder Igneo, we will be able to fund the level of investment in the network that will be required to help support the prosperity of the region and wellbeing of its people.”

OIO approval is expected within three to six months, with settlement to follow. In the meantime, it’s business as usual for the Eastland Network team.

Forsyth Barr acted as Eastland Group’s Financial Advisor in respect of this transaction.

For further information, please see: https://trusttairawhiti.nz/network-sale.