State-owned Mighty River Power will have higher debt than previously expected as its funds the construction of the Ngatamariki geothermal power station with no proposed change to the dividend payout ratio policy of 75 percent, Standard & Poor's sai
State-owned Mighty River Power will have higher debt than previously expected as its funds the construction of the Ngatamariki geothermal power station with no proposed change to the dividend payout ratio policy of 75 percent, Standard & Poor's said.
The credit rating company said the company's BBB corporate credit rating and stable outlook were not immediately affected by its commitment to fund the $466 million 82MW power station.
But the company's key credit metrics would track at the low end of expectations for the rating.
"Accordingly, there is limited tolerance at the current rating level for any additional debt-funded projects, particularly associated with Mighty River Power's global energy fund, or for Mighty River Power to fall short of its planned targets."
S&P said Ngatamariki would be supportive of the company’s business profile, but downward rating pressure could occur if the company showed a higher risk appetite by operating below threshold metrics on a sustained basis.
There has been speculation that Mighty River Power will be the first state asset to be partially sold off by the Government if it is re-elected.
The Government signalled plans for a "mixed ownership model" policy for Mighty River, Meridian, Genesis and Solid Energy plus reducing its 75 per cent holding in Air New Zealand in the budget.
