- Eastland Group and sole shareholder Trust Tairāwhiti say right time to unlock value from the company’s successful growth to transform for the future.
- Review has identified sale of electricity lines company, Eastland Network as best option to release funds.
- A successful sale will enable Eastland Group to support region’s move towards a zero-carbon future, and Trust Tairāwhiti diversify its portfolio and boost long-term community investments.
Eastland Group and its sole shareholder, Trust Tairāwhiti have today announced a plan to unlock value from the successful growth of Eastland Group to underpin future investment in the region’s energy transformation and support community wellbeing.
Tairāwhiti-based Eastland Group specialises in regional infrastructure, and has a total asset value approaching $900 million. The company’s operations include Eastland Port, Gisborne Airport and Eastland Network – the electricity network for Gisborne, Wairoa and the East Coast – as well as Eastland Generation, which produces renewable energy from geothermal power plants in the Bay of Plenty and a hydro scheme near Wairoa.
Chair of Eastland Group, Matanuku Mahuika says that after almost two decades of significant growth, now is the time to use a portion of the value built up in Eastland Group to further benefit Tairāwhiti through a release of funds to the company and its shareholder.
“Alongside our own assessment, independent advisors carried out an extensive review of Eastland Group’s capital structure. A range of options were considered and the sale of the lines business, Eastland Network, was identified as the best option to underpin the future success of the company, the Trust and Tairāwhiti. The company and the Trust have therefore agreed to put Eastland Network on the market.
“Eastland Network has served the region well as a foundation asset of Eastland Group. It will continue to do so regardless of ownership. It’s where it all began and has supported us to grow to where we are today and set us up for the future. The transformational change underway in the energy sector presents an opportunity for greater investment in local renewable generation.
“We have a big role to play in supporting the transition to a zero-carbon economy. By divesting this asset now we can invest more to help build the energy capacity and resilience needed to power a sustainable future for the region.
“Importantly, the regulations that apply to Eastland Network mean there are ongoing protections for local consumers around price and quality, including quality of supply.
“As well as allowing a significant return of funds to the shareholder, the network sale will provide funds for Eastland Group’s strong pipeline of projects including local and national renewable energy projects, and the port expansion.”
One example of how Eastland Group is actively exploring opportunities for renewable energy generation in its home region is the project to build a utility scale solar power plant at Gisborne Airport. Resource consent has been granted, and construction is planned to start later this year.
Chair of Trust Tairāwhiti, John Clarke said the sale will release further funds to the Trust, allowing the Trust to deliver meaningful impacts for beneficiaries.
“Success looks like us ensuring the right buyer on the right terms to deliver for Tairāwhiti. This opportunity also allows the Trust to re-balance and diversify its investment portfolio. The Trust will use the funds to continue delivering more on our important kaupapa of regional wellbeing and providing for our current and future beneficiaries for the long-term. As the sole shareholder of Eastland Group, the Trust sought its own independent advice and agreed that this plan to enable more investment in our region is prudent and well considered. It has the full support of the Trustees.”
Subject to a successful sale, the Trust will continue its conversations with the community on where they would like to see investment in regional wellbeing.
Forsyth Barr has been appointed as the advisor to run the sale process, which is expected to commence shortly.
Eastland Group and Trust Tairāwhiti will keep staff, beneficiaries and stakeholders updated through key stages of the process.