In 1994, Morrison & Co saw the opportunity to invest during the corporatisation of formerly co-operative owned distribution companies and began accumulating a position in Trustpower, with a gradual move from a minority position to a controlling stake in 2006.

Overview

In 2016, Trustpower had assets of over $3.5bn with 1,111MW of installed capacity. On 1 November 2016, Trustpower completed the demerger of the Company's wind and generation assets with the incorporation of a New Zealand listed company called Tilt Renewables. Trustpower has 19 hydro schemes spread across New Zealand with 430MW capacity and a 129MW consented project pipeline and an electricity retail business with over 378,000 customers, 31,000 gas customers and 69,000 telco service customers. Tilt Renewables has 2 wind farms in New Zealand totaling 197MW capacity and 2 wind farms in Australia with 371MW capacity. There is a further 400MW New Zealand consented project pipeline, 105 MW consented wind site in Western Australia, 52MW consented wind site in Victoria with an unconsented option for 40MW of solar.

  • In April 1994, Morrison & Co saw the opportunity to invest during corporatisation of formerly co-operative owned distribution companies and began accumulating a position in Trustpower (TPW.NZ) with a gradual move from a minority position to a controlling stake 

  • On 1 November 2016, Trustpower completed the demerger of the company’s wind and generation assets with the incorporation of a New Zealand listed company called Tilt Renewables

  • The demerger was implemented by way of a scheme of arrangement which received overwhelming shareholder support to proceed with 99.06% of votes cast in favour of the demerger at the Special General Meeting held on 9 September 2016

  • Prior to the demerger, as of 30th September 2016 Trustpower had delivered a 19% return to Infratil over 22 years


Investment rationale and strategy

Following detailed analysis of the long term wholesale electricity price path, Morrison & Co recognised the value of incumbent hydro generation capacity as well as the opportunity for new build and investment and the potential to influence as a sector-specialist active minority investor.

Morrison & Co's initial investment strategy included the implementation of governance and risk management systems, the sale of the distribution business, the acquisition of hydro stations during a period of low wholesale price, acquiring government consents to develop and build new hydro and wind projects and the gradual move from a minority investor to a controlling stake. Trustpower successfully managed consenting, development and the timing of the capital investment programme over this time.

Based on this experience, Morrison & Co recognised the opportunity to capitalise on Australia's large-scale renewable energy target (RET) scheme. Trustpower's experience enabled the successful implementation of a development pipeline and the assessment of other opportunities over the long-term, including the maintenance of long-dated development options, determining contracted revenue options post maturity of PPA's and the assessment of wind farm repowering opportunities.

 

Other Case Studies

A selection of current and previous investments

Wellington Airport

Z Energy

Infratil Energy Australia

Public Infrastructure Partners Fund