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