April 2, 2025 • 30 mins
Go inside Meridian’s takeover proposal with Craig Stobo, Chair of NZ Windfarms, and Neal Barclay, outgoing Meridian CEO. The two leaders weigh in on the $91M offer, the coming shareholder vote, and the future of renewable energy in New Zealand.
Discover the motivations behind the deal, the potential of the $600M Te Rere Hau project, and what happens if the proposal falls through. And hear what this acquisition could mean for the country's energy industry, for investors in both companies— and maybe even for your power bill.
Keep an eye out for a bonus interview with Neal Barclay coming next week.
For more or to watch on YouTube—check out http://linktr.ee/sharedlunch
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The onshore wind resource in New Zealand is the best
in the world. We think it's the best wind site
in the country. Most other wind farms in New Zealand
thirty five to forty forty five. Maybe this is fifty
percent plus, so's it's an exceptional wind sit.
Speaker 2 (00:13):
It's an independent wind generator, so it's not tied to
the gentailis for example. It's also a pure play on
wind energy.
Speaker 1 (00:20):
Of climate change, we're likely to get more rain into
where the hydro catchments are in this country and more
wind into those areas that we're building wind farms.
Speaker 3 (00:33):
Curer and welcome to shed Lunch, brought to you by Shasis.
I'm Helen Madison, and today we take a look at
the takeover offer for New Zealand Wind Farms by Gen
Taylor Meridian. If you haven't heard, this share offer represented
a value of ninety one million dollars and a premium
of one hundred and seven percent to the company's share
(00:54):
price at the close of trading on febru the eighteenth.
There are a number of things riding on this, including
a shareholder vote in May and High court approval. Are
we talking to both the chair of New Zealand Wind
Farms Craig Stobo and Meridium CEO Neil Barclay to get
the picture for investors about what the steel means. Before
we get started, here's some important information.
Speaker 4 (01:17):
Investing involves the risk you might lose the money you
start with. We recommend talking to a licensed financial advisor.
We also recommend reading product disclosure documents before deciding to invest.
Everything you're about to see and here is current at
the time of recording.
Speaker 3 (01:32):
Welcome Craig. Great to have you in the studio, Thanks
for coming in.
Speaker 2 (01:34):
Good morning to you, Thank you for having me.
Speaker 3 (01:36):
Now, the market seems to have quite liked the Meridian
offer for New Zealand Wind Farms. The share price doubled.
Probably fair to say it's been in the doul drums
a little. Did you have any idea what to.
Speaker 2 (01:47):
Expect, well know, in the sense of how the market
would exactly react, But you're right. It went from twelve
point one cents the day before then the announcement was
twenty five cents, and it sprint it up to around
twenty three twenty three and a half, so one hundred
and seventy percent from the day before. But of course
the market then takes a view on the certainty of
(02:07):
that transaction, so they don't quite go to twenty five cents.
They go to twenty three to twenty and a half
until they get more information, which is still forthcoming. So
expect the share price to hang around the until we
get certainty of the outcome.
Speaker 3 (02:20):
We've got about twenty thousand investors on shares ease, which
is about twelve percent. I think of your register, which
is a fair chunk for a retail block. What do
you think they brought into New Zealand wind Farms. There's
quite a few loyal people that have been there for
quite sometime. Why do you think it was attractive?
Speaker 2 (02:37):
I think people came in with a couple of reasons.
One is it's an independent wind generator, so it's not
tied to the gent tailors for example. It's also a
pure play on wind energy, and it's close to people.
You can see the site, you can see the changes
that are going on, and it's a very small company
and it's pretty much four directors and roughly twelve staff,
(02:57):
so it's you can wrap your head around what they're
trying to do. It's pretty simple to understand. People came
in Originally all of them have come in for the dividends,
but we signaled a couple of years ago that we
were moving into a development mode and we ceased paying dividends.
That upset a few of our investors, including the Chares.
These investors but were very clear that we could not
stay where we were. We had to redevelop the existing
(03:20):
two blade turbines. As they age and they don't have
a management contract, we can go and get new parts
because it's original technology which finishes and ceases. We's out
in the twenty thirties or thereabout, so we had to
make a decision to refurbish those or to go for
a larger development, and we went for a larger development,
(03:41):
and hence we paused dividends and then announced this major
transaction with Meridian as our partner, which gave you one
confidence that the pathway could be achieved with a very
good partner and availability of capital and project expertise.
Speaker 3 (03:55):
So it's just clarify there. So you've got a joint
venture with Meridian to repower extend to really Hoe. Now
to really Hoe is your biggest asset pretty much, and
obviously what Meridian will get all the energy from you know,
once it's redone. Now that's that's a pretty big undertaking
and you needed, obviously their help to do that. I
(04:16):
think it's over six hundred million. Would this upgrade be
possible without.
Speaker 2 (04:21):
Meridian and our view know, because we're at that stage,
a forty million dollar valued company on the New Zealand
Exchange with a five to fifty million dollar project in
front of us. So we needed partners at several levels.
We needed partners who would agree to buy the power
(04:42):
at the end of the project, which is called a
power purchased agreement a PPA. And we needed someone to
co invest with us in the project. So needed to
be someone who could guarantee the power off take at
the end and who had the skills to help develop
the project. As that decision was made, we went to
an ur request for proposals to the marketplace and Meridian
(05:03):
came back worth a ten plus five off take agreement
for the power at the end of the project.
Speaker 3 (05:09):
What does that mean? Ten plus five so ten.
Speaker 2 (05:11):
Years plus five more years, so fifteen years of guaranteed
off take of the power from the.
Speaker 3 (05:16):
And that's all of the powers.
Speaker 2 (05:18):
And that's really important because if you get a credit
worthy purchaser of the power generated by the site. When
the project starts for ten to fifteen years, it means
it's very bankable as a project. So banks are saying, well,
i've got security of revenue coming through, I'm happy to
make a loan to the company or the JV in
this case to be able to facilitate the development of
(05:40):
the project. And so those projects can be quite highly geared,
so you can have a lot of debt in those
projects because of the security of that revenue stream. So
that was very, very important. In addition, the partner had
to demonstrate that they could develop the wind farm with us,
and as it turns out, Meridian had been completing Harder
Pucky further up the Spine North Island with another wind
(06:01):
farm development, so they had credentials in development and they
knew the logistics of trying to get a new farm
or extension up and running. And at the same time
they said, well, we'll do all that, but we'd like
to buy nineteen point nine to nine percent of the
shares in your company. So we issued new shares with
the Concenter shareholders to allow them to come in and
become a real partner. Across several layers, and so they
(06:24):
are able to provide us for the expertise for that
part of the project for their fifty percent, then we
had our fifty percent, which is still a big amount
of money for us to raise. So we were in
the project process of also inviting equity participants to come
in from around the world, and we've got amazing responses
for those, and so we're going down the track of
(06:47):
looking at crafting the final terms of what the equity
providers could give to us. When Meridian popped up and said, well,
actually we like the whole thing, so can we buy
all of your shares please twenty five cents And we
announced that to the market after we've done our own
internal thinking about what was a fair price for the
(07:08):
company and what was in the best interest of our
shareholders because we have choices to stay and develop with
all the risks associated with that, or we can take
a price today which recognizes all the work that the
board and the management team had done to get to
this point, which was around all the risks that have
to be managed and then the logistics to get to
(07:29):
a final investment decision. And when you weigh those two
things up, the board decided that it was in the
best interests of shareholders to take the money today twenty
five cents, so that's why the share price jumped so
quickly from twelve point one to roughly twenty three cents today.
So we have to go through a few things though,
to get to that shareholder vote, which is required. We
(07:49):
need to get an independent appraisal so evaluation report, which
would tell us tell us the company, the board and
shareholders that this is in the best of the company
because the share price offered reflects the value that the
valuer thinks company's worth, and they'll give us a range,
I assume, like they do with other reports. A. Secondly,
(08:10):
we've got to go through a process that's signed off
by the court, so you have certain documentation you have
to get out and we hope to get that out
in the next few weeks and then there'll be a
shareholder vote, hopefully in duing quarter. We're going as fast
as we can, but that's the current timetable. So yes,
it's it's a it's a process of thinking about your
(08:31):
shareholders and what's in their best interests.
Speaker 3 (08:33):
And you think this is better for them, I mean,
you will be no longer the last or you will
be the last independent.
Speaker 2 (08:40):
Well, and it's not. It's not quite it's quite not
quite true. I mean, there's several ways to think about this.
The project keeps going. It's just done by Meridium, so
you know, in terms of the generation needs of the country,
it continues, it's just not done by New Zealand wind farms.
But in terms of other independence, there's obviously the Manua
are independent but are subject to it's a Commerce Commission issue, clearly.
(09:04):
But there's also Pioneer Energy in the South Island. I mean,
so there are independents around there are still Okay, yeah,
they're not listed. It's like it's probably what you're trying
to say is that we don't have many listed independent
renewable enerjury companies, but there are privately owned renewable companies
in the for example, the solar space, and if you
look at the Transper website, there is a long list
(09:26):
of possible projects yet to come to fruition. So I
wouldn't rule out the possibility of others coming to the
market if they think that's the best thing for a
liquidity event. But you're right, at the moment we are
the last independent listed one generator you know, so there's
choices depending on your motivation to come up to New
(09:46):
Zealand wind Farms. Was it the renewable play? Well, okay,
you can continue with that. It's not going to be
a small company play. It'll be the Meridian play, which
is you know, it's a very large listed entity on
the stocks change.
Speaker 3 (09:58):
Quite different. Yeah, Gentaylor compared to go.
Speaker 2 (10:00):
As Gentata, so it's combined. You're right, it's not a
pure production play. It has retail as well. I know
you're right.
Speaker 3 (10:06):
There are a few hopes to jump through. As you've
just explained, what if it fails, what's the plan? So
we've compilated that.
Speaker 2 (10:13):
So that would require us to go back to where
we are today head of all this process, and that
would mean well, our view is that if the twenty
five cents is not an off of, the share price
won't be at twenty three cents. So that's one thing.
Of course, people are at the share prices at twenty
three cents or so today because of the prospect of
twenty five cents in Dune quarter, So that would change.
(10:35):
I think secondly, we would have to go back to
contemplating how we would raise dead inequity again. For our
share of the project, and we've just in discussions with Meridian,
agreed that if that was to happen, Meridian would fund
our half of our fifty percent. So Meridian's got fifty
percent of the project, we've got fifty percent. We need
(10:56):
to fund half of our fifty percent, and so they've
agreed for nine point eight million dollars to come in
and fund that. Now that's not our view of the
value of that slice of our business, but it's a
backup so that we can fund what we need to do.
But it does mean down the track we'll need to
go to the sheer market again to raise more capital.
Speaker 3 (11:15):
Yeah, because that nine point eight.
Speaker 2 (11:16):
Million that covers us for our you know.
Speaker 3 (11:19):
We're near what's going to cost us it though.
Speaker 2 (11:21):
Well, it gets us, it gets us through the initial
initial stages, but we still need we still need bank
project debt, all those other things need to happen. So
it's a it's a more difficult outcome in the sense
that it doesn't value and our view value that fifty
percent as much as the twenty five cents does. But
(11:41):
it means we can continue and live another day and
go out to the marketplace as we develop the other
parts of our portfolio, how Nui in the South wai
Rapa or other other development projects that are on the
foot at the moment.
Speaker 3 (11:55):
So how Nui that was what you brought from Genesis
back in October twenty twenty four. How does that compare
to this.
Speaker 2 (12:01):
Well, it's another development opportunity in our view. So it
has only twelve percent of the output of our current
wind farm at to rehow so not the redevelopment one
but the existing one. So it's small, but it has
development possibilities to upgrade the existing Ennicon turbines and put
(12:22):
and put more turbines on the same site. So we
saw that as a great opportunity to improve the economics
of that site. And it was an asset that Genesis
clear didn't want and so I'm very happy to take
it over, which was a great a great acquisition for
us Q four last year.
Speaker 3 (12:41):
But doesn't Genesis get the power from that site? So
what will happen if Meridian does well?
Speaker 2 (12:46):
They have a contract with us, so the contract stays.
Speaker 3 (12:48):
In place, right, So even though Meridian would potentially buy
New Zealand wind farms, then they would be supplying Genesis
with power.
Speaker 2 (12:58):
From that absolutely just.
Speaker 3 (13:00):
To finish off what would be your message for and
using wind Farm investors.
Speaker 2 (13:05):
So at this point in our history of the company,
we have a twenty five cent offer from Meridian in
front of us to purchase all the shares from our
shareholders at twenty five cents as we go through this
scheme of arrangement process in that in the documentation that
(13:26):
will be pros and cons given to investors around why
you should or while you should not. But the question
in our minds was the relative risks of both cash
in the hand at twenty five cents, which we'll see
what the independent value sees, but in our view as
a fair price given all the work we've done today
to get the developments up to this point in time,
(13:48):
you could say there are other opportunities in front of
us with the empowering and how Nui and our other sites,
but there are also risks with those. Nothing is certain
about the future. We haven't got to a final investment
decision yet for Drury, how and that requires us to
look at all the logistics of the repowering, the civil engineering,
(14:09):
the electrical engineering, the new turbines taking down the old turbines.
There's lots of things to happen, right, and there's always
always risks for that outlook. So on balance, if the
independent value agrees with us, then we think twenty five
cents is a great outcome for our current shareholders and
is unanimously supported by the Board of directors.
Speaker 3 (14:30):
And there's no white knights in the wings? Are there?
Speaker 2 (14:34):
If there are, the wings haven't flown to me, So
I don't know.
Speaker 3 (14:40):
So Craig from New Zealand wind Farms says there are
no white knights in the wings. Why is Meridian so keen?
According to Meridian CEO Neil Barclay, it's a pretty spectacular sight.
Plus for him, there's pressure to make this deal happen
sooner than later. I sat down with Neil Barclay to
give investors the Meridian perspective. Neil, welcome to the studio.
(15:03):
Thanks hell you are leaving Meridian. I think at the
end of June, when we think about this New Zealand
Wind Farms scheme, if you like the in vestas are
going to be looking at. Is this something you wanted
to get across the line before you leave.
Speaker 1 (15:16):
Yeah, it is. Look, when you take on a CEO
roll like mine, you don't. You don't do it to
create some sort of legacy. You do it to sort
of work with teams and do some good things. But
of late I have started to look back and think
about the legacy that I might be leaving behind. And
there's some things I'm super proud of. I think the
way we've developed our retail proposition and Meridian is our standing.
(15:40):
We've grown our market share. We're almost double the size
of the retail business in the last five six years.
And in my time in the business, we've also built
about six wind farms in New Zealand, couple in Australia,
and with Teriri Ho we would have we would have
produced enough new renewable energy to power about half a
(16:01):
million homes and I think that's something that I'm very
proud to leave behind.
Speaker 3 (16:05):
To very hope is the wind farm near Palmerston North,
which is really the crown and the jewel for New
Zealand wind farms. If that the steel goes through, what
does that do for what Meridian has I think you've
got about is it eight wind farms.
Speaker 1 (16:19):
We've got six operating wind farms in New Zealand at
the moment. This would be our seventh, but it's also
our largest, so it would increase the portfolio of wind
assets by about thirty five percent. That's significant. New Zealand's
Meridians largely are our hydro generator. Most of our generation
assets are in the South Island, but this would bring
(16:40):
our wind portfolio up to about twenty percent of our
total generation. That's becoming quite meaningful.
Speaker 3 (16:45):
Is their plans to extend that even further. I mean,
what's there.
Speaker 1 (16:49):
Yeah, absolutely, Look, we've got huge amount of renewable resources
in this country and that's that's our future, that's our opportunity.
So we've been working on build portfolio of options that
we can develop, both wind, solar. We've even got a
battery being built in North End right now. We expect
to sign off on about a billion dollars of investment
(17:09):
this this calendar year, which would include ter Aria and
about three billion dollars by the end of this decade
and about ten billion dollars by twenty fifty. Is part
of our efforts to help decarbonize the New Zealand economy.
Speaker 3 (17:22):
Where does Soula fit with that? What's the ideal sort
of percentage break down for those three types of energy?
Speaker 1 (17:28):
Well, I think hydro will remain the mainstay of the
New Zealand electricity system. We're so lucky to have it.
It's so flexible, it's it's you know, it's.
Speaker 3 (17:37):
The lately lags being down the lakes.
Speaker 1 (17:42):
Can move around a wee bit. But what we what
we know is as we build out more wind, solar
and the geo thermal that's been built is very helpful
as well. The risk of hydro shortfall actually reduces because
we've got a more diversified generation fleet around the whole country.
So that's really our future now. Solar has a strong
part to play. What we've been finding of late, interestingly
(18:04):
but not too surprisingly, is when we have those high,
very calm weather systems that don't bring the rain, they
also don't bring the wind. Alternatively, solar is a really
strong generation option at times like that. So we think
solar complements wind, hydro and the GFM or we have
in the system today and will ultimately get us to
(18:25):
one hundred percent renewable electricity.
Speaker 3 (18:27):
Because how often would you need to rely on, say, thermal,
which is sort of coal and gas, well it was
gas for a while anyway.
Speaker 1 (18:35):
The amount of thermal generation in the New Zealand system
has reduced from about well about thirty five percent of
the total system needs fifteen years ago to about twelve
percent today. So that's going down all the time. And
we will burn less and less thermal fuel as we progress,
(18:55):
as we build more wind, solar and decarbonize. But when
we do need it, we really need it, yeah, and
that's like last winter and like this coming winter. And
we've got a problem in this country because investments slowed
down in the gas and domestic gas. And that's unfortunate
because domestic gas it was a lot more is a
(19:16):
lot less carbon intensive than burning coal. But what what's
occurred is the investment hasn't gone in. We've got a
short full of gas, so we're actually having to burn
more coal in times where we have low hydrome flows.
We will manage through that. It's probably a two to
three year sort of inch point, we're calling it. But
as the new renewables, including projects like terrariy Hoe, come
(19:37):
on stream, we'll start burning less coal again and just transition.
It's inevitable we transition to close to one hundred percent
electricity grit and that's going to happen probably overin the
next fifteen years, next.
Speaker 3 (19:52):
Fifteen years, right, Yeah, because this last winter was tough,
and even your interim results just recently that really showed
that you had so hedging that you had to do
because you didn't have that gas coming on stream, and
you had to pay for that because you had a
loss I think was one twenty one million net loss.
Com me to say, you know, a profit of one
hundred and ninety one million the year before, quite a
(20:15):
big difference. Are you confident that, say investors looking at
this now from the New Zealand wind farmer's perspective, that
you can kind of mitigate that and not have quite
the same thing happen or Yeah.
Speaker 1 (20:27):
Look, Meridian, we're a renewables only energy company. We rely
on Mother Nature. So when it doesn't rain, we don't
have the fuel to generate to meet our customer commitment,
so we have to buy generation from someone else, and
so we plan for the type of event that happened
last year. We carry a balance sheet is very very
(20:48):
if you caught unleathered lun leavered, it's very flexible. There's
a lot of capacity in the balance sheet to be
able to cope with a poor financial year. On the
back of a really extreme weather situation that our you know,
it was the driest period between April and August, sorry
May and August twenty twenty four that we've ever seen.
We've actually just gone into another dry It's been the
(21:09):
driest period between December in mid March that we've ever seen.
But we're still in reasonably good shape for the winter
and it's starting to rain now, which is helpful. But
we've had a couple of really extreme where the systems.
That's what we set our business up to cope with,
and it doesn't put too much pressure on the business
at all. We expect to get back to something more
(21:30):
like normal going forward, and it wouldn't slow down our
commitment to building new and your wal projects, and certainly
wouldn't slow down a commitment to building Teleio.
Speaker 3 (21:40):
Looking at Derera, how then it was a development project.
What has been what still is at the minute, a
fifty to fifty joint menture between you and New Zealand
Wind Farms. You now want to buy the entire company
and you have a twenty percent stake called Ready. When
was it that you thought, oh, what's the point of
us keeping going like this? Why don't we just take
the whole going.
Speaker 1 (22:00):
On a few months back, as we were moving through
the project and as the JV partnership went to the
market to assess what the level of debt the JV
would have to incur would be, and the cost of
that debt, became pretty apparent that given Meridians flexible balance
sheet that we just referred to, we could borrow the
(22:21):
money a lot more cheaply than the JV could. And
that was the value equation That meant that us taking
a much larger stake in New Zealand wind Farms would
make sense for New Zealand Wind Farms shareholders and ultimately
from Meridian shareholders as well. It's a more efficient way
to finance the project to make sure it gets delivered
(22:42):
as quickly as we can.
Speaker 3 (22:43):
And you obviously did a bit more due diligence before
you made that call, and you were pretty happy obviously
with what you saw.
Speaker 1 (22:50):
Yeah. Absolutely, we think it's the best wind sight in
the country. Why is that it's just the wind conditions
that perfect it, or have about a fifty percent more
than fifty percent capacity factor, So that means if you
build it to produce a certain amount of energy, you'll
get at least fifty percent out of that. Now compare
that to say what they get in Australia late twenties,
(23:11):
most other wind farms in New Zealand thirty five to
forty forty five. Maybe this is fifty percent plus. So's
it's an exceptional wind site, very windy place as anyone
from Palming North, Not that I.
Speaker 3 (23:22):
Do, but I've been past it and it's always going
that's for sure.
Speaker 2 (23:25):
Yeah.
Speaker 1 (23:26):
So it's a great site because of the existing wind
farm there. We can leverage some of the roading and
so forth that's already in existence, so there are some
cost savings available. We're not at the point of commitment though,
so there's still work to be done. There's still risks involved,
(23:46):
and you never know for sure exactly what when you're
going to get out of it until because until you've
stand stood up the thirty nine turbines that will hopefully
go into play in this particular wind farm.
Speaker 3 (23:58):
Yeah, so we're talking thirty nine in a couple of stages.
I think that is, isn't it.
Speaker 1 (24:03):
No, No, that'll be built. Sorry, it's two separate parts
of the property, but it will be developed as one.
Speaker 3 (24:10):
Project, one project okay, and I mean the cost is
still significant though I've seen figures of five hundred to
six hundred million as well.
Speaker 1 (24:17):
It'll be north of six million. So it's a huge
project begun to take in. But it's you know, this
is what we do. And we've built six of these
so far, plus a couple in Australia. We know what,
we know how to do it. We've got the experienced
team and they will get it done. But there's still
some challenges in front of us. And to give you
(24:39):
an example, just two days ago, within the wind farm,
the existing wind farm its south there's an airways facility
that communicates with planes flying over and around the region,
really important piece of kit. We had agreed with the
airways to reposition that that facility to a different high
point in the region away from the wind farm. Turns
(25:01):
out that that new spot won't work. They can't get
the radio signals that they need, so we need to
find another place. Now there are other options, but it
means that we're likely to delay the project by another
month or two as we work that through. These are
the sorts of things that you work through as a
wind farmer. It's often two steps forward one step back,
(25:24):
maybe a couple of sideways, but I think what we
have shown at Meridian we have the capability and the
experience to get it done, and we will get it done.
Speaker 3 (25:33):
Are we first class in the world then for wind farming?
Speaker 1 (25:36):
Yeah? Absolutely. The onshore wind resource in New Zealand is
the best in the world. When I first joined Meridian,
I went off to see one of our main supply
seemens in Denmark and they had the wind farm out
here in Wellington at marcra will call it west Wind
plastered all over their buildings because it was the best
performing wind farm that they had built anywhere in the world.
(26:00):
Terrary whole will be an even stronger performing asset than
that one.
Speaker 3 (26:03):
Because with climate change we're supposed to get windier. So
is it even is it even more potential?
Speaker 1 (26:09):
Yeah? In New Zealand there is absolutely. It's interesting with
climate change we're likely to get more rain into where
the hydro catchments are in this country and more wind
into those areas that we're building wind farms, so it
should improve the overall generation capability. Out of the assets
that are that are being deployed, have been deployed and
(26:30):
will be deployed.
Speaker 3 (26:32):
You said before, there's a few hurdles to go. You've got,
you know, a few things you need to sort out.
There's a shareholder vote, there's a High Court commist commission.
I think there's a number of regulatory things as well.
How confident are you that this will will go through?
Speaker 1 (26:48):
Well, we think the offer that we're put on the
table is outstanding value for New Zealand ship wind Farm shareholders.
You're getting a good return on the asset and taking
no risk from this point on, and there's still quite
a lot of risk and work to be done. So
we think it's a really good a really good option.
We think it's a fair deal and it's a fear
for the Meridian shareholders as well. So we think it's
(27:11):
a great example of working together with a board that
have actually put their asset on us. You know, we've
had to front with our very best foot sorry, put
our very best foot forward. But we think it'll work
through the process and subject to shareholder approval, it'll be
a great outcome for all concerned.
Speaker 3 (27:31):
We've got quite a big contingent of shareholders on cheesies,
I think twenty twelve percent, which is quite something for
a retailed block. Do you ever hear from them or
do you sort of know much about what they might
be thinking since this was announced.
Speaker 1 (27:46):
I think we No, I haven't heard directly other than
through the New Zealand Wind Farms board members. They're communicating
directly with their shareholders. It's not for us other than
the sort of sort of pitch, But from aridiance perspective,
we're learning more and getting more engaged for shares these shareholders,
(28:07):
for sure. And I think our CFO Mike Grohn is
who's who's the next CEO? By the way, He's been
on a couple of sort of similar podcasts as are,
So yeah, it's it's it's certainly an area of growth.
It's a great opportunity for Kiwis to take ownership of
some outstanding assets in our country. I use it myself
(28:29):
for my share portfolio. So yeah, No, we're happy and
more than willing to engage with share shares these shareholders
as much as yeah, of use to them.
Speaker 3 (28:41):
I won't ask you for tips then on cheer training
this time.
Speaker 1 (28:46):
No, I wouldn't at the moment either, because the share
market is in Yeah, it's it's blood on the floor
all over the place, but it's due to international matters
that are outside of we folk in New Zealand just
going to ride through that for the time.
Speaker 3 (29:03):
When you think about those New Zealand Wind Farms shareholders,
I mean they are potentially going to be shareholders in Meridian.
It's quite a different company to what they signed up for.
It's a gen Taylor. It's got, as you said before,
a number of challenges and opportunities. What would you say
to them?
Speaker 1 (29:21):
Our growth prospects are fantastic renewable energies the future. It's
the competitive advantage for New Zealand. So it's certainly a
place that I have a lot of personal holdings in
the company and I'll keep that even when I've moved
on from being chief executive.
Speaker 3 (29:40):
Thanks to Neil Barclay of Meridian and Craig Stobo of
New Zealand Wind Farms for their insights around the potential takeover.
Also look out for a bonus episode with Neil Barclay
as we find out what it's like to be a
CEO of a gent Taylor. You can watch Shared Lunch
on YouTube or follow us on your favorite podcast app.
Leave us waiting and tell us what you'd like to
(30:01):
hear next mm hmm,
The onshore wind resource in New Zealand is the best
in the world. We think it's the best wind site
in the country. Most other wind farms in New Zealand
thirty five to forty forty five. Maybe this is fifty
percent plus, so's it's an exceptional wind sit.
Speaker 2 (00:13):
It's an independent wind generator, so it's not tied to
the gentailis for example. It's also a pure play on
wind energy.
Speaker 1 (00:20):
Of climate change, we're likely to get more rain into
where the hydro catchments are in this country and more
wind into those areas that we're building wind farms.
Speaker 3 (00:33):
Curer and welcome to shed Lunch, brought to you by Shasis.
I'm Helen Madison, and today we take a look at
the takeover offer for New Zealand Wind Farms by Gen
Taylor Meridian. If you haven't heard, this share offer represented
a value of ninety one million dollars and a premium
of one hundred and seven percent to the company's share
(00:54):
price at the close of trading on febru the eighteenth.
There are a number of things riding on this, including
a shareholder vote in May and High court approval. Are
we talking to both the chair of New Zealand Wind
Farms Craig Stobo and Meridium CEO Neil Barclay to get
the picture for investors about what the steel means. Before
we get started, here's some important information.
Speaker 4 (01:17):
Investing involves the risk you might lose the money you
start with. We recommend talking to a licensed financial advisor.
We also recommend reading product disclosure documents before deciding to invest.
Everything you're about to see and here is current at
the time of recording.
Speaker 3 (01:32):
Welcome Craig. Great to have you in the studio, Thanks
for coming in.
Speaker 2 (01:34):
Good morning to you, Thank you for having me.
Speaker 3 (01:36):
Now, the market seems to have quite liked the Meridian
offer for New Zealand Wind Farms. The share price doubled.
Probably fair to say it's been in the doul drums
a little. Did you have any idea what to.
Speaker 2 (01:47):
Expect, well know, in the sense of how the market
would exactly react, But you're right. It went from twelve
point one cents the day before then the announcement was
twenty five cents, and it sprint it up to around
twenty three twenty three and a half, so one hundred
and seventy percent from the day before. But of course
the market then takes a view on the certainty of
(02:07):
that transaction, so they don't quite go to twenty five cents.
They go to twenty three to twenty and a half
until they get more information, which is still forthcoming. So
expect the share price to hang around the until we
get certainty of the outcome.
Speaker 3 (02:20):
We've got about twenty thousand investors on shares ease, which
is about twelve percent. I think of your register, which
is a fair chunk for a retail block. What do
you think they brought into New Zealand wind Farms. There's
quite a few loyal people that have been there for
quite sometime. Why do you think it was attractive?
Speaker 2 (02:37):
I think people came in with a couple of reasons.
One is it's an independent wind generator, so it's not
tied to the gent tailors for example. It's also a
pure play on wind energy, and it's close to people.
You can see the site, you can see the changes
that are going on, and it's a very small company
and it's pretty much four directors and roughly twelve staff,
(02:57):
so it's you can wrap your head around what they're
trying to do. It's pretty simple to understand. People came
in Originally all of them have come in for the dividends,
but we signaled a couple of years ago that we
were moving into a development mode and we ceased paying dividends.
That upset a few of our investors, including the Chares.
These investors but were very clear that we could not
stay where we were. We had to redevelop the existing
(03:20):
two blade turbines. As they age and they don't have
a management contract, we can go and get new parts
because it's original technology which finishes and ceases. We's out
in the twenty thirties or thereabout, so we had to
make a decision to refurbish those or to go for
a larger development, and we went for a larger development,
(03:41):
and hence we paused dividends and then announced this major
transaction with Meridian as our partner, which gave you one
confidence that the pathway could be achieved with a very
good partner and availability of capital and project expertise.
Speaker 3 (03:55):
So it's just clarify there. So you've got a joint
venture with Meridian to repower extend to really Hoe. Now
to really Hoe is your biggest asset pretty much, and
obviously what Meridian will get all the energy from you know,
once it's redone. Now that's that's a pretty big undertaking
and you needed, obviously their help to do that. I
(04:16):
think it's over six hundred million. Would this upgrade be
possible without.
Speaker 2 (04:21):
Meridian and our view know, because we're at that stage,
a forty million dollar valued company on the New Zealand
Exchange with a five to fifty million dollar project in
front of us. So we needed partners at several levels.
We needed partners who would agree to buy the power
(04:42):
at the end of the project, which is called a
power purchased agreement a PPA. And we needed someone to
co invest with us in the project. So needed to
be someone who could guarantee the power off take at
the end and who had the skills to help develop
the project. As that decision was made, we went to
an ur request for proposals to the marketplace and Meridian
(05:03):
came back worth a ten plus five off take agreement
for the power at the end of the project.
Speaker 3 (05:09):
What does that mean? Ten plus five so ten.
Speaker 2 (05:11):
Years plus five more years, so fifteen years of guaranteed
off take of the power from the.
Speaker 3 (05:16):
And that's all of the powers.
Speaker 2 (05:18):
And that's really important because if you get a credit
worthy purchaser of the power generated by the site. When
the project starts for ten to fifteen years, it means
it's very bankable as a project. So banks are saying, well,
i've got security of revenue coming through, I'm happy to
make a loan to the company or the JV in
this case to be able to facilitate the development of
(05:40):
the project. And so those projects can be quite highly geared,
so you can have a lot of debt in those
projects because of the security of that revenue stream. So
that was very, very important. In addition, the partner had
to demonstrate that they could develop the wind farm with us,
and as it turns out, Meridian had been completing Harder
Pucky further up the Spine North Island with another wind
(06:01):
farm development, so they had credentials in development and they
knew the logistics of trying to get a new farm
or extension up and running. And at the same time
they said, well, we'll do all that, but we'd like
to buy nineteen point nine to nine percent of the
shares in your company. So we issued new shares with
the Concenter shareholders to allow them to come in and
become a real partner. Across several layers, and so they
(06:24):
are able to provide us for the expertise for that
part of the project for their fifty percent, then we
had our fifty percent, which is still a big amount
of money for us to raise. So we were in
the project process of also inviting equity participants to come
in from around the world, and we've got amazing responses
for those, and so we're going down the track of
(06:47):
looking at crafting the final terms of what the equity
providers could give to us. When Meridian popped up and said, well,
actually we like the whole thing, so can we buy
all of your shares please twenty five cents And we
announced that to the market after we've done our own
internal thinking about what was a fair price for the
(07:08):
company and what was in the best interest of our
shareholders because we have choices to stay and develop with
all the risks associated with that, or we can take
a price today which recognizes all the work that the
board and the management team had done to get to
this point, which was around all the risks that have
to be managed and then the logistics to get to
(07:29):
a final investment decision. And when you weigh those two
things up, the board decided that it was in the
best interests of shareholders to take the money today twenty
five cents, so that's why the share price jumped so
quickly from twelve point one to roughly twenty three cents today.
So we have to go through a few things though,
to get to that shareholder vote, which is required. We
(07:49):
need to get an independent appraisal so evaluation report, which
would tell us tell us the company, the board and
shareholders that this is in the best of the company
because the share price offered reflects the value that the
valuer thinks company's worth, and they'll give us a range,
I assume, like they do with other reports. A. Secondly,
(08:10):
we've got to go through a process that's signed off
by the court, so you have certain documentation you have
to get out and we hope to get that out
in the next few weeks and then there'll be a
shareholder vote, hopefully in duing quarter. We're going as fast
as we can, but that's the current timetable. So yes,
it's it's a it's a process of thinking about your
(08:31):
shareholders and what's in their best interests.
Speaker 3 (08:33):
And you think this is better for them, I mean,
you will be no longer the last or you will
be the last independent.
Speaker 2 (08:40):
Well, and it's not. It's not quite it's quite not
quite true. I mean, there's several ways to think about this.
The project keeps going. It's just done by Meridium, so
you know, in terms of the generation needs of the country,
it continues, it's just not done by New Zealand wind farms.
But in terms of other independence, there's obviously the Manua
are independent but are subject to it's a Commerce Commission issue, clearly.
(09:04):
But there's also Pioneer Energy in the South Island. I mean,
so there are independents around there are still Okay, yeah,
they're not listed. It's like it's probably what you're trying
to say is that we don't have many listed independent
renewable enerjury companies, but there are privately owned renewable companies
in the for example, the solar space, and if you
look at the Transper website, there is a long list
(09:26):
of possible projects yet to come to fruition. So I
wouldn't rule out the possibility of others coming to the
market if they think that's the best thing for a
liquidity event. But you're right, at the moment we are
the last independent listed one generator you know, so there's
choices depending on your motivation to come up to New
(09:46):
Zealand wind Farms. Was it the renewable play? Well, okay,
you can continue with that. It's not going to be
a small company play. It'll be the Meridian play, which
is you know, it's a very large listed entity on
the stocks change.
Speaker 3 (09:58):
Quite different. Yeah, Gentaylor compared to go.
Speaker 2 (10:00):
As Gentata, so it's combined. You're right, it's not a
pure production play. It has retail as well. I know
you're right.
Speaker 3 (10:06):
There are a few hopes to jump through. As you've
just explained, what if it fails, what's the plan? So
we've compilated that.
Speaker 2 (10:13):
So that would require us to go back to where
we are today head of all this process, and that
would mean well, our view is that if the twenty
five cents is not an off of, the share price
won't be at twenty three cents. So that's one thing.
Of course, people are at the share prices at twenty
three cents or so today because of the prospect of
twenty five cents in Dune quarter, So that would change.
(10:35):
I think secondly, we would have to go back to
contemplating how we would raise dead inequity again. For our
share of the project, and we've just in discussions with Meridian,
agreed that if that was to happen, Meridian would fund
our half of our fifty percent. So Meridian's got fifty
percent of the project, we've got fifty percent. We need
(10:56):
to fund half of our fifty percent, and so they've
agreed for nine point eight million dollars to come in
and fund that. Now that's not our view of the
value of that slice of our business, but it's a
backup so that we can fund what we need to do.
But it does mean down the track we'll need to
go to the sheer market again to raise more capital.
Speaker 3 (11:15):
Yeah, because that nine point eight.
Speaker 2 (11:16):
Million that covers us for our you know.
Speaker 3 (11:19):
We're near what's going to cost us it though.
Speaker 2 (11:21):
Well, it gets us, it gets us through the initial
initial stages, but we still need we still need bank
project debt, all those other things need to happen. So
it's a it's a more difficult outcome in the sense
that it doesn't value and our view value that fifty
percent as much as the twenty five cents does. But
(11:41):
it means we can continue and live another day and
go out to the marketplace as we develop the other
parts of our portfolio, how Nui in the South wai
Rapa or other other development projects that are on the
foot at the moment.
Speaker 3 (11:55):
So how Nui that was what you brought from Genesis
back in October twenty twenty four. How does that compare
to this.
Speaker 2 (12:01):
Well, it's another development opportunity in our view. So it
has only twelve percent of the output of our current
wind farm at to rehow so not the redevelopment one
but the existing one. So it's small, but it has
development possibilities to upgrade the existing Ennicon turbines and put
(12:22):
and put more turbines on the same site. So we
saw that as a great opportunity to improve the economics
of that site. And it was an asset that Genesis
clear didn't want and so I'm very happy to take
it over, which was a great a great acquisition for
us Q four last year.
Speaker 3 (12:41):
But doesn't Genesis get the power from that site? So
what will happen if Meridian does well?
Speaker 2 (12:46):
They have a contract with us, so the contract stays.
Speaker 3 (12:48):
In place, right, So even though Meridian would potentially buy
New Zealand wind farms, then they would be supplying Genesis
with power.
Speaker 2 (12:58):
From that absolutely just.
Speaker 3 (13:00):
To finish off what would be your message for and
using wind Farm investors.
Speaker 2 (13:05):
So at this point in our history of the company,
we have a twenty five cent offer from Meridian in
front of us to purchase all the shares from our
shareholders at twenty five cents as we go through this
scheme of arrangement process in that in the documentation that
(13:26):
will be pros and cons given to investors around why
you should or while you should not. But the question
in our minds was the relative risks of both cash
in the hand at twenty five cents, which we'll see
what the independent value sees, but in our view as
a fair price given all the work we've done today
to get the developments up to this point in time,
(13:48):
you could say there are other opportunities in front of
us with the empowering and how Nui and our other sites,
but there are also risks with those. Nothing is certain
about the future. We haven't got to a final investment
decision yet for Drury, how and that requires us to
look at all the logistics of the repowering, the civil engineering,
(14:09):
the electrical engineering, the new turbines taking down the old turbines.
There's lots of things to happen, right, and there's always
always risks for that outlook. So on balance, if the
independent value agrees with us, then we think twenty five
cents is a great outcome for our current shareholders and
is unanimously supported by the Board of directors.
Speaker 3 (14:30):
And there's no white knights in the wings? Are there?
Speaker 2 (14:34):
If there are, the wings haven't flown to me, So
I don't know.
Speaker 3 (14:40):
So Craig from New Zealand wind Farms says there are
no white knights in the wings. Why is Meridian so keen?
According to Meridian CEO Neil Barclay, it's a pretty spectacular sight.
Plus for him, there's pressure to make this deal happen
sooner than later. I sat down with Neil Barclay to
give investors the Meridian perspective. Neil, welcome to the studio.
(15:03):
Thanks hell you are leaving Meridian. I think at the
end of June, when we think about this New Zealand
Wind Farms scheme, if you like the in vestas are
going to be looking at. Is this something you wanted
to get across the line before you leave.
Speaker 1 (15:16):
Yeah, it is. Look, when you take on a CEO
roll like mine, you don't. You don't do it to
create some sort of legacy. You do it to sort
of work with teams and do some good things. But
of late I have started to look back and think
about the legacy that I might be leaving behind. And
there's some things I'm super proud of. I think the
way we've developed our retail proposition and Meridian is our standing.
(15:40):
We've grown our market share. We're almost double the size
of the retail business in the last five six years.
And in my time in the business, we've also built
about six wind farms in New Zealand, couple in Australia,
and with Teriri Ho we would have we would have
produced enough new renewable energy to power about half a
(16:01):
million homes and I think that's something that I'm very
proud to leave behind.
Speaker 3 (16:05):
To very hope is the wind farm near Palmerston North,
which is really the crown and the jewel for New
Zealand wind farms. If that the steel goes through, what
does that do for what Meridian has I think you've
got about is it eight wind farms.
Speaker 1 (16:19):
We've got six operating wind farms in New Zealand at
the moment. This would be our seventh, but it's also
our largest, so it would increase the portfolio of wind
assets by about thirty five percent. That's significant. New Zealand's
Meridians largely are our hydro generator. Most of our generation
assets are in the South Island, but this would bring
(16:40):
our wind portfolio up to about twenty percent of our
total generation. That's becoming quite meaningful.
Speaker 3 (16:45):
Is their plans to extend that even further. I mean,
what's there.
Speaker 1 (16:49):
Yeah, absolutely, Look, we've got huge amount of renewable resources
in this country and that's that's our future, that's our opportunity.
So we've been working on build portfolio of options that
we can develop, both wind, solar. We've even got a
battery being built in North End right now. We expect
to sign off on about a billion dollars of investment
(17:09):
this this calendar year, which would include ter Aria and
about three billion dollars by the end of this decade
and about ten billion dollars by twenty fifty. Is part
of our efforts to help decarbonize the New Zealand economy.
Speaker 3 (17:22):
Where does Soula fit with that? What's the ideal sort
of percentage break down for those three types of energy?
Speaker 1 (17:28):
Well, I think hydro will remain the mainstay of the
New Zealand electricity system. We're so lucky to have it.
It's so flexible, it's it's you know, it's.
Speaker 3 (17:37):
The lately lags being down the lakes.
Speaker 1 (17:42):
Can move around a wee bit. But what we what
we know is as we build out more wind, solar
and the geo thermal that's been built is very helpful
as well. The risk of hydro shortfall actually reduces because
we've got a more diversified generation fleet around the whole country.
So that's really our future now. Solar has a strong
part to play. What we've been finding of late, interestingly
(18:04):
but not too surprisingly, is when we have those high,
very calm weather systems that don't bring the rain, they
also don't bring the wind. Alternatively, solar is a really
strong generation option at times like that. So we think
solar complements wind, hydro and the GFM or we have
in the system today and will ultimately get us to
(18:25):
one hundred percent renewable electricity.
Speaker 3 (18:27):
Because how often would you need to rely on, say, thermal,
which is sort of coal and gas, well it was
gas for a while anyway.
Speaker 1 (18:35):
The amount of thermal generation in the New Zealand system
has reduced from about well about thirty five percent of
the total system needs fifteen years ago to about twelve
percent today. So that's going down all the time. And
we will burn less and less thermal fuel as we progress,
(18:55):
as we build more wind, solar and decarbonize. But when
we do need it, we really need it, yeah, and
that's like last winter and like this coming winter. And
we've got a problem in this country because investments slowed
down in the gas and domestic gas. And that's unfortunate
because domestic gas it was a lot more is a
(19:16):
lot less carbon intensive than burning coal. But what what's
occurred is the investment hasn't gone in. We've got a
short full of gas, so we're actually having to burn
more coal in times where we have low hydrome flows.
We will manage through that. It's probably a two to
three year sort of inch point, we're calling it. But
as the new renewables, including projects like terrariy Hoe, come
(19:37):
on stream, we'll start burning less coal again and just transition.
It's inevitable we transition to close to one hundred percent
electricity grit and that's going to happen probably overin the
next fifteen years, next.
Speaker 3 (19:52):
Fifteen years, right, Yeah, because this last winter was tough,
and even your interim results just recently that really showed
that you had so hedging that you had to do
because you didn't have that gas coming on stream, and
you had to pay for that because you had a
loss I think was one twenty one million net loss.
Com me to say, you know, a profit of one
hundred and ninety one million the year before, quite a
(20:15):
big difference. Are you confident that, say investors looking at
this now from the New Zealand wind farmer's perspective, that
you can kind of mitigate that and not have quite
the same thing happen or Yeah.
Speaker 1 (20:27):
Look, Meridian, we're a renewables only energy company. We rely
on Mother Nature. So when it doesn't rain, we don't
have the fuel to generate to meet our customer commitment,
so we have to buy generation from someone else, and
so we plan for the type of event that happened
last year. We carry a balance sheet is very very
(20:48):
if you caught unleathered lun leavered, it's very flexible. There's
a lot of capacity in the balance sheet to be
able to cope with a poor financial year. On the
back of a really extreme weather situation that our you know,
it was the driest period between April and August, sorry
May and August twenty twenty four that we've ever seen.
We've actually just gone into another dry It's been the
(21:09):
driest period between December in mid March that we've ever seen.
But we're still in reasonably good shape for the winter
and it's starting to rain now, which is helpful. But
we've had a couple of really extreme where the systems.
That's what we set our business up to cope with,
and it doesn't put too much pressure on the business
at all. We expect to get back to something more
(21:30):
like normal going forward, and it wouldn't slow down our
commitment to building new and your wal projects, and certainly
wouldn't slow down a commitment to building Teleio.
Speaker 3 (21:40):
Looking at Derera, how then it was a development project.
What has been what still is at the minute, a
fifty to fifty joint menture between you and New Zealand
Wind Farms. You now want to buy the entire company
and you have a twenty percent stake called Ready. When
was it that you thought, oh, what's the point of
us keeping going like this? Why don't we just take
the whole going.
Speaker 1 (22:00):
On a few months back, as we were moving through
the project and as the JV partnership went to the
market to assess what the level of debt the JV
would have to incur would be, and the cost of
that debt, became pretty apparent that given Meridians flexible balance
sheet that we just referred to, we could borrow the
(22:21):
money a lot more cheaply than the JV could. And
that was the value equation That meant that us taking
a much larger stake in New Zealand wind Farms would
make sense for New Zealand Wind Farms shareholders and ultimately
from Meridian shareholders as well. It's a more efficient way
to finance the project to make sure it gets delivered
(22:42):
as quickly as we can.
Speaker 3 (22:43):
And you obviously did a bit more due diligence before
you made that call, and you were pretty happy obviously
with what you saw.
Speaker 1 (22:50):
Yeah. Absolutely, we think it's the best wind sight in
the country. Why is that it's just the wind conditions
that perfect it, or have about a fifty percent more
than fifty percent capacity factor, So that means if you
build it to produce a certain amount of energy, you'll
get at least fifty percent out of that. Now compare
that to say what they get in Australia late twenties,
(23:11):
most other wind farms in New Zealand thirty five to
forty forty five. Maybe this is fifty percent plus. So's
it's an exceptional wind site, very windy place as anyone
from Palming North, Not that I.
Speaker 3 (23:22):
Do, but I've been past it and it's always going
that's for sure.
Speaker 2 (23:25):
Yeah.
Speaker 1 (23:26):
So it's a great site because of the existing wind
farm there. We can leverage some of the roading and
so forth that's already in existence, so there are some
cost savings available. We're not at the point of commitment though,
so there's still work to be done. There's still risks involved,
(23:46):
and you never know for sure exactly what when you're
going to get out of it until because until you've
stand stood up the thirty nine turbines that will hopefully
go into play in this particular wind farm.
Speaker 3 (23:58):
Yeah, so we're talking thirty nine in a couple of stages.
I think that is, isn't it.
Speaker 1 (24:03):
No, No, that'll be built. Sorry, it's two separate parts
of the property, but it will be developed as one.
Speaker 3 (24:10):
Project, one project okay, and I mean the cost is
still significant though I've seen figures of five hundred to
six hundred million as well.
Speaker 1 (24:17):
It'll be north of six million. So it's a huge
project begun to take in. But it's you know, this
is what we do. And we've built six of these
so far, plus a couple in Australia. We know what,
we know how to do it. We've got the experienced
team and they will get it done. But there's still
some challenges in front of us. And to give you
(24:39):
an example, just two days ago, within the wind farm,
the existing wind farm its south there's an airways facility
that communicates with planes flying over and around the region,
really important piece of kit. We had agreed with the
airways to reposition that that facility to a different high
point in the region away from the wind farm. Turns
(25:01):
out that that new spot won't work. They can't get
the radio signals that they need, so we need to
find another place. Now there are other options, but it
means that we're likely to delay the project by another
month or two as we work that through. These are
the sorts of things that you work through as a
wind farmer. It's often two steps forward one step back,
(25:24):
maybe a couple of sideways, but I think what we
have shown at Meridian we have the capability and the
experience to get it done, and we will get it done.
Speaker 3 (25:33):
Are we first class in the world then for wind farming?
Speaker 1 (25:36):
Yeah? Absolutely. The onshore wind resource in New Zealand is
the best in the world. When I first joined Meridian,
I went off to see one of our main supply
seemens in Denmark and they had the wind farm out
here in Wellington at marcra will call it west Wind
plastered all over their buildings because it was the best
performing wind farm that they had built anywhere in the world.
(26:00):
Terrary whole will be an even stronger performing asset than
that one.
Speaker 3 (26:03):
Because with climate change we're supposed to get windier. So
is it even is it even more potential?
Speaker 1 (26:09):
Yeah? In New Zealand there is absolutely. It's interesting with
climate change we're likely to get more rain into where
the hydro catchments are in this country and more wind
into those areas that we're building wind farms, so it
should improve the overall generation capability. Out of the assets
that are that are being deployed, have been deployed and
(26:30):
will be deployed.
Speaker 3 (26:32):
You said before, there's a few hurdles to go. You've got,
you know, a few things you need to sort out.
There's a shareholder vote, there's a High Court commist commission.
I think there's a number of regulatory things as well.
How confident are you that this will will go through?
Speaker 1 (26:48):
Well, we think the offer that we're put on the
table is outstanding value for New Zealand ship wind Farm shareholders.
You're getting a good return on the asset and taking
no risk from this point on, and there's still quite
a lot of risk and work to be done. So
we think it's a really good a really good option.
We think it's a fair deal and it's a fear
for the Meridian shareholders as well. So we think it's
(27:11):
a great example of working together with a board that
have actually put their asset on us. You know, we've
had to front with our very best foot sorry, put
our very best foot forward. But we think it'll work
through the process and subject to shareholder approval, it'll be
a great outcome for all concerned.
Speaker 3 (27:31):
We've got quite a big contingent of shareholders on cheesies,
I think twenty twelve percent, which is quite something for
a retailed block. Do you ever hear from them or
do you sort of know much about what they might
be thinking since this was announced.
Speaker 1 (27:46):
I think we No, I haven't heard directly other than
through the New Zealand Wind Farms board members. They're communicating
directly with their shareholders. It's not for us other than
the sort of sort of pitch, But from aridiance perspective,
we're learning more and getting more engaged for shares these shareholders,
(28:07):
for sure. And I think our CFO Mike Grohn is
who's who's the next CEO? By the way, He's been
on a couple of sort of similar podcasts as are,
So yeah, it's it's it's certainly an area of growth.
It's a great opportunity for Kiwis to take ownership of
some outstanding assets in our country. I use it myself
(28:29):
for my share portfolio. So yeah, No, we're happy and
more than willing to engage with share shares these shareholders
as much as yeah, of use to them.
Speaker 3 (28:41):
I won't ask you for tips then on cheer training
this time.
Speaker 1 (28:46):
No, I wouldn't at the moment either, because the share
market is in Yeah, it's it's blood on the floor
all over the place, but it's due to international matters
that are outside of we folk in New Zealand just
going to ride through that for the time.
Speaker 3 (29:03):
When you think about those New Zealand Wind Farms shareholders,
I mean they are potentially going to be shareholders in Meridian.
It's quite a different company to what they signed up for.
It's a gen Taylor. It's got, as you said before,
a number of challenges and opportunities. What would you say
to them?
Speaker 1 (29:21):
Our growth prospects are fantastic renewable energies the future. It's
the competitive advantage for New Zealand. So it's certainly a
place that I have a lot of personal holdings in
the company and I'll keep that even when I've moved
on from being chief executive.
Speaker 3 (29:40):
Thanks to Neil Barclay of Meridian and Craig Stobo of
New Zealand Wind Farms for their insights around the potential takeover.
Also look out for a bonus episode with Neil Barclay
as we find out what it's like to be a
CEO of a gent Taylor. You can watch Shared Lunch
on YouTube or follow us on your favorite podcast app.
Leave us waiting and tell us what you'd like to
(30:01):
hear next mm hmm,
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