Contact Energy moves to acquire remaining stake in King Country Energy
Contact Energy (ASX: CEN) has made a non-binding indicative offer to purchase the remaining 24.98% stake in King Country Energy from King Country Trust for approximately $47 million. The Contact Energy King Country acquisition would give the company full ownership of the hydro portfolio it currently operates through its wholly owned subsidiary, King Country Energy Holdings, which holds approximately 75% of the shares. The consideration is expected to be paid in scrip, with new Contact shares issued to the Trust rather than cash.
The transaction represents a consolidation play that would simplify Contact’s ownership structure and align economic ownership with the operational control it already exercises over the generation assets.
What is King Country Energy?
King Country Energy operates five hydropower stations across two regions. Four stations are located within the King Country region, with one in the Horowhenua region. Contact already operates and maintains these stations under existing arrangements, meaning the acquisition would bring assets the company already manages fully in-house.
The portfolio has total installed capacity of approximately 53MW and average expected annual generation of approximately 190GWh. This is not new generation capacity for Contact’s operations — the company runs these assets already. Full ownership would remove minority interest complexity and align economic ownership with operational control.
| Metric | Detail |
|---|---|
| Stations | 5 hydropower |
| Locations | King Country (4), Horowhenua (1) |
| Installed capacity | ~53MW |
| Annual generation | ~190GWh |
Understanding scrip-based acquisitions
Scrip consideration means King Country Trust would receive new Contact shares rather than cash payment. This structure preserves Contact’s cash position while still completing the acquisition.
For investors, scrip deals result in minor dilution as new shares are issued, but they avoid the need for debt funding or depleting cash reserves. The scrip structure signals Contact’s confidence in its share value and preserves balance sheet flexibility for other capital allocation priorities.
Timeline and next steps
King Country Trust is undertaking a Special Ownership Review and public consultation in accordance with its Trust Deed requirements to inform its decision on whether to accept Contact’s offer. The consultation is expected to commence shortly and run for approximately one month. If both parties elect to proceed with the transaction, a sale and purchase agreement would be expected to be signed and completed in Q2 CY26 (April-June 2026).
The offer remains non-binding and indicative at this stage, with final consideration and transaction terms subject to agreement between Contact and the Trust.
The process steps are:
- Public consultation commences (February/March 2026)
- Trust decision on whether to accept
- Sale and purchase agreement negotiation
- Expected completion Q2 CY26
Multiple steps remain before any deal is finalised. Investors should monitor for updates on the consultation outcome and execution of a binding agreement. Contact subsidiary King Country Energy Holdings would take transfer of the King Country Energy shares and become the sole shareholder upon completion if the transaction proceeds.
The Contact Energy King Country acquisition would consolidate the company’s hydro portfolio under full ownership, though terms remain subject to final agreement between the parties.
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