Contact Energy Ltd (NZX & ASX: CEN) confirmed this week that it has completed sale of the Ahuroa gas storage facility.
Contact sold the Ahuroa gas storage facility and associated assets to Gas Services New Zealand (GSNZ), an associate of First Gas Ltd and it will now operate as Flex Gas.
One conditions in the transaction was GSNZ obtaining an IRD binding ruling as to the tax treatment of the main assets acquired.
Contact said the parties have agreed to complete the transaction despite the condition remaining unsatisfied. While terms of the agreements are substantially unchanged, $10 million of the total consideration of $200 M remains contingent on obtaining a future favourable binding ruling in line with the historic treatment.
The initial $190 M cash proceeds received by Contact will be subject to income tax payable of about $45 M with net transaction proceeds of $144 M - after transaction costs of $1 M - applied to reduction of debt.
Contact is expected to record an unaudited estimated gain on the disposal of assets of about $5 M.