Redacted report on Alpine near ‘meaningless’

A report which provided part of the basis for the proposed sale of 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 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’’.

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

However, the EY report is so heavily redacted it gives little indication as to why there is such a big discrepancy in the values.

Stuff asked the 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.

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

In a letter to Stuff, released this week, council chief executive Bede Carran said 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 council proposed to sell down TDHL’s 47.5 per cent share in 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.