Hawke’s Bay Power Consumers Trust to continue ownership of Unision after review
The Hawke’s Bay Power Consumers Trust will continue ownership of power utility Unison, after a five yearly ownership review.
At a public meeting, Hawke’s Bay Power Consumers Trust announced its decision, unanimously supported by all Trustees.
HBPCT Chair Diana Kirton says the meeting was for Unison directors to hear the final deliberations of Trustees, as part of reaching a decision on the current ownership review of Unison.
“The Trust Deed outlines the process that must be followed for the review, and that process has been followed. “
PwC produced a report of their assessment of Unison’s performance and together with a report from Unison’s Directors, was made available to the public on 15 September.
Following a month-long submission process, 198 submitters offered their views to Trustees.
11 submitters chose to present their submission to Trustees at a public meeting on 10 November.
“We are delighted with the level of awareness and response to this ownership review. This was substantially more than for any previous review, and submissions were almost equally split between keeping the current ownership model, and changing it.”
During the meeting each Trustee presented their thoughts following consideration of the Unison directors’ report, as well as the views of the public. As follows:
Trustee Jeff Farnworth cautioned about the difference between private and Trust owned companies. Private shareholders – they require a profit.
“Electricity Distribution Businesses have to supply yearly information disclosures, and my conclusion is that Unison compares extremely well with all companies private and Trust owned, and in fact most times come out above average in most metrics.”
“I’ve read all the (nearly 200) submissions, split about 50/50 between status quo and sell. However I’m assuming over 60,000 consumers who we haven’t heard from are comfortable with the status quo, therefore I couldn’t recommend selling.”
Trustee Barbara Arnott says that taking into account the PWC report (which clearly sets out pros and cons) the Unison Directors’ recommendation, and the submissions it is not hard to come to a view on the big picture
“It was clear that for many of both advocates of distribute the shares and those who advocated retain, the ownership review process as set out in the Deed was oblique. For a few very invested distribute submitters there was a conundrum in that the Trust was following the process as set out in the Deed, but although that was what was wanted by the submitters, they weren’t comfortable with it. Others talked about ‘review’ more generally including changing from a consumer trust to a community trust and that has merit.”
“Indeed a five year ownership review is a construct that might be more appropriate to occur when the need is there, rather than by dates and the Deed provides for this. Regardless, I believe a review is desirable.”
Trustee Kirsten Westwood said: “I have considered the Unison Directors’ report and the PWC report. Unison Directors are unanimous in support of the current model. I am cognisant that alternative forms of ownership may need to be considered if circumstances change.”
“HBPCT is open to alternative forms of ownership or triggers should the need arise, but it is clear that this is not needed currently.”
Trustee David Pearson said: “I have considered the recommendations from the Unison Directors , the PwC report, and all the submissions received – 198 in total, roughly split 50:50 in favour of and against the current ownership model.”
“Those submitters who spoke to their submissions were heard, and good points were made, particularly around some of our processes. I thank all submitters for taking the time to do so.”
“I believe Unison to be a well-managed and governed company who perform favourably in industry benchmarking surveys and are achieving good capital growth. Trustees receive monthly information and sometimes more regularly if there is a need.”
Kirton said: “I have read the PwC report, the Unison Directors’ report and all submissions from the public numerous times. I am impressed with the level of consideration given by many of the submitters. I have now heard the views of Trustees which I fully endorse.”
“I also note the suggestion from a supporter of trust ownership that comprehensive research into the social value that trust ownership brings be carried out in the future. This could compare the value of alternate trust models.”
“For these reasons, I also support the recommendation from Unison directors for the ownership to remain with the Hawke’s Bay Power Consumers Trust.”