The Tauranga Energy Consumer Trust has sold almost 75 per cent of its holding in Tilt Renewables to Mercury New Zealand for $2.30 per share.

Total proceeds from the divestment is $143.8 million, and gives Mercury a 19.99 per cent stake in Tilt.

The price of $2.30 represents a significant premium of 24.3 per cent over the closing price of $1.85.

The Trust has also granted Mercury an option over its remaining 6.8 per cent holding in Tilt at $2.30 per share. If this option is exercised, the Trust will receive a further $49 million.

The trustees say they are ‘extremely happy' with the price received, considering the stake is non-controlling.

TECT acquired a shareholding in Tilt Renewables due to the demerger of Trustpower in November 2016 where Trustpower shareholders received shares in both Tilt Renewables Limited and Trustpower.

TECT acquired 83,878,838 shares in Tilt Renewables Limited.

Subsequently, TECT has been reviewing its shareholding in Tilt Renewables on the basis that TECT has a high concentration of its portfolio invested in the generation sector, and that with a growth focus, the company will likely be a low dividend paying stock with high capital calls in the near to medium term.

The sale will allow TECT to further diversify its investment portfolio, and as such trustees will look to reinvest the funds as part of its wider diversified portfolio.

'We have enjoyed our investment in Tilt and the value the shares represent, but given the significant premium offered, it was in the best interests of our beneficiaries to accept the offer,” says TECT chair Bill Holland.

'We now have the ability to invest over $140 million in other opportunities, further diversifying our portfolio and hopefully increasing the cash returns for the Trust and its beneficiaries.”