The proposed plan by TECT to cease giving annual cheques to Trustpower's eligible customers and change its status to a charitable trust is not in the best interest for Trustpower, its shareholders, customers and the people within the Tauranga district.
While Trustpower has been able to fix its pricing slightly higher than most other power companies, they have been able to do this because of the inducement of the annual TECT cheque.
A number of us are both consumers and shareholders. The share price has already fallen 10 per cent since the announcement.
Trustpower will need to react to TECT's proposal to retain its loyal current customers by making their pricing more competitive, or by some other means of enticing us to remain shareholders and consumers.
If Trustpower does not respond to these challenges, that would place us in a similar situation as if we were still receiving TECT's cheque. Loyal customers will exit in droves and this will have a negative impact on Trustpower's profitability and dividend distribution.
For TECT to continue to distribute funds to the community, whether it be via charities or individuals, Trustpower needs to be a variant company, and TECT's proposal puts this in question.
B Porter, Welcome Bay.