✨ Financial Statements and Resource Consents
4594 NEW ZEALAND GAZETTE No. 174
ELECTRICITY CORPORATION OF NEW ZEALAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
17. FINANCIAL INSTRUMENTS (Cont.)
(iii) Fair Values
The estimated fair values of ECNZ’s other financial instruments are as follows:
| 1996 | 1995 | |||
|---|---|---|---|---|
| Carrying value | Fair value | Carrying value | Fair value | |
| $M | $M | $M | $M | |
| Short Term Loans | 227 | 222 | 106 | 99 |
| Term Liabilities | 742 | 698 | 1,277 | 1,382 |
| Currency and Interest Rate Swaps | - | (39) | - | (9) |
| Foreign Exchange Contracts | - | (0.2) | - | (2) |
| Forward Rate Agreements | - | (0.2) | - | (0.01) |
| Interest Rate Options | (0.05) | 0.1 | - | (0.1) |
Cash and short term deposits, accounts receivable, accounts payable, other current assets and current liabilities are excluded from the table above because, due to their short term nature, the carrying value of these items is equal to their fair value.
The following methods were used to estimate the fair values of the following classes of financial instrument:
(a) Term Liabilities and Short Term Loans
The fair value of ECNZ’s term liabilities and short term loans is estimated based on current market interest rates available to ECNZ for debt of a similar maturity. ECNZ anticipates that these liabilities will be held to maturity and that settlement at fair value is unlikely.
(b) Currency and Interest Rate Swaps, Foreign Exchange Contracts, Forward Rate Agreements, Interest Rate Options and Interest Rate Futures
The fair value of these instruments is estimated based on their quoted market prices.
18. RESOURCE CONSENTS
ECNZ requires water and air consents, obtained under the Resource Management Act 1991, to enable it to operate its thermal and hydro power stations. The duration of consents vary up to 35 years. The number of significant consents and their respective renewable dates are summarised below:
| Renewable Dates | Number of Consents |
|---|---|
| 1996 | |
| Within 2 Years | 1 |
| Between 2 and 4 Years | - |
| Between 4 and 6 Years | 8 |
| Between 6 and 8 Years | 1 |
| Later than 10 Years | 8 |
| Total Significant Consents | 18 |
The renewable dates are fixed either by the expiry date of the consent or, where there is no expiry date, by the renewal date of 1 October 2001 set by the Resource Management Act. Most consents are or will be subject to periodic reviews.
19. DEBT DEFEASANCE
Leased Asset
In the year ended 31 March 1993 a payment of $216 million was made to a third party which extinguished financial obligations of $233 million arising under a new finance lease for high voltage electricity equipment. ECNZ has a purchase option under the finance lease to acquire all of the leased equipment on 31 March 2008. Under a separate lease agreement with ECNZ, Haywards Limited (a subsidiary of Trans Power New Zealand Limited) has an option to acquire the same leased assets from ECNZ on 31 March 2008.
Sale of Trans Power New Zealand Limited
On 1 July 1994 ECNZ sold Trans Power New Zealand Limited to the Crown. As part of that arrangement $1,588 million of debt was extinguished through an in-substance defeasance with the Crown for an equivalent amount.
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VUW Te Waharoa —
NZ Gazette 1996, No 174
NZLII —
NZ Gazette 1996, No 174
✨ LLM interpretation of page content
🏭
Electricity Corporation Financial Position
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Instruments, Currency Risk, Interest Rate Risk, Revenue Risk, Credit Risk, Foreign Exchange, Swaps, Contracts, Hedging, Electricity
🏗️ Resource Consents for Power Stations
🏗️ Infrastructure & Public WorksResource Management Act, Water Consents, Air Consents, Thermal Power, Hydro Power, Renewable Dates
💰 Debt Defeasance Transactions
💰 Finance & RevenueLeased Asset, Finance Lease, High Voltage Equipment, Sale of Trans Power New Zealand Limited, Debt Extinguishment, Crown