Aurora: "Reverse Midas" Steve Thompson Chairs both Aurora Energy & Alpine Energy

One day - don't hold your breath - there will be a special news item. 

"Aurora has been certified SNAFU-free!"

"To celebrate, 25000 biodegradable balloons tied to Royal Gala apples are being released for the benefit of the flying pigs in both provinces."

Richard Healey   25 October 2019 on Facebook:

Steve Thompson is the Chair of both Aurora Energy and it's South Canterbury counterpart Alpine Energy. It's becoming clearer to me by the day that his management style has produced the same results for both sets of ratepayers - total disaster.
Read this piece and the attached report. It seems to me that this man has the reverse Midas touch - everything he touches turns to crap. FIFTY PERCENT lopped off the value of Alpine in just a couple of years.
Could this be the reason that the Office of the Auditor General recently spent a month and a half in the Alpine offices? I hope the people of Timaru are smarter than the people of Dunedin when it comes to wrenching back control of their floundering power company.

This could have massive consequences for Aurora and Dunefin. What is the true "fair value" of the company? One thing is for certain, no one at the DCC has a clue.

 

Heavily redacted Alpine Energy valuation report 'almost meaningless'

Matthew Littlewood, Oct 25 2019, Stuff.co.nz 
https://tinyurl.com/y52n3xqq

 

See what he means? 

Tbere are numerous pages of this kind of thing so for simplicity the text 

has been omitted leaving only a representative sample of redactions. 

Admire this as creative use of bold stripe motif, 

or make up your own fragments to fill in the blanks.

You could even go to the link and see the redacted pages, 

just for the lols.

 

 

 

A report which provided part of the basis for the proposed sale of lines company Alpine Energy has finally been released - almost a year after it was requested - but most of the information it contains has been blacked out.

The report was commissioned by EY (formerly Ernst Young) for Timaru District Holdings Ltd - the Timaru District Council's holdings company - which owns a 47.5 per cent share of Alpine Energy.

The other shareholders are Lines Trust South Canterbury (40 per cent), Waimate District Council (7.54 per cent) and Mackenzie District Council (4.96 per cent).

Business commentator Rod Oram says the heavily redacted EY report is "almost meaningless".

The EY report says "our assessment of the Fair Value of 100 per cent of the equity in Alpine Energy Ltd lies in the range of $182.4m to $206.1m with a mid-point of $194.1m".

READ MORE:
* Timaru District Council spent $89k on Alpine Energy consultation
* HC Partners slam Alpine Energy sale proposal as irresponsible
* Pressure mounting on council to abandon Alpine Energy share sale proposal

In 2017, Deloittes valued Alpine Energy at $362m-$423m.

Joseph Kelly/Supplied

Economist Shamubeel Eaqub says the extent of the redactions of the EY report were "farcical".

However, the EY report is so heavily redacted that it does not give much of an indication as to why there is such a big discrepancy in the values.

Stuff asked the Timaru District Council for a copy of the report under the Local Government Official Information and Meetings Act (LGOIMA) in November 2018 - a request which was initially declined by the council at the request of Alpine Energy. 

Stuff then complained to the Ombudsman's office in December 2018 arguing that the information was in the public interest, as the company was publicly owned. This week a heavily redacted version of the report was finally released. 

Supplied

Newsroom journalist Bernard Hickey says 'commercial sensitivity' is often invoked for political means.

Alpine Energy chief executive Andrew Tombs would not be drawn into what was blacked out, other than to say it was "commercially sensitive" information. 

When approached for further comment, he said he had "nothing else to add". 

In a letter to Stuff, released this week, council chief executive Bede Carran explained that the EY report was originally withheld "at the request of Alpine Energy".

"We have been liaising with the officials from the Ombudsman's Office on the matter, and have also consulted with Alpine Energy," the letter says.

"We are comfortable that the attached redacted version balances the interests of disclosure of information with protecting the legitimate commercial interests of Alpine Energy." 

However, business commentator Rod Oram says the heavy redactions "make the report meaningless."

"It's difficult to tell what is genuinely 'commercially sensitive' and what isn't, because the report is so heavily blacked out," Oram said.

Last year, the Timaru District Council proposed to sell down TDHL's 47.5 per cent share in lines company Alpine Energy, but this was abandoned after a major public backlash, with hundreds of submissions against it. 

"The council says the business is no longer up for sale. Even if it was, potential buyers would do their own valuation anyway, so to invoke commercial sensitivity is a bit of a stretch," Oram said. 

Oram said the appendices of the EY report, which were not redacted, listed a series of 'comparable companies' and 'comparable transactions'. These, though, would have been of little if any use to the council or TDHL. 

"EY are not comparing apples with apples. They're mentioning huge international electricity companies alongside smaller lines companies.

"Likewise, their comparisons of New Zealand lines company transactions range from $2.7m to $2.7billion in value, with a wide range of price to earnings multiples across those acquisitions. What the council got out of the report is really hard to determine."

Economist Shamubeel Eaqub said the extent of redaction was "farcical - but common in my experience"

"It speaks to some bigger issues in terms of how council staff appear not to understand where the boundaries are between public interest and confidentiality," Eaqub said. 

Newsroom journalist Bernard Hickey said the level of redaction signalled that the LGOIMA was "broken".

"The information shouldn't be secret but commercial confidentiality is often used and abused for political ends," Hickey said.

 Stuff.co.nz  https://tinyurl.com/y52n3xqq