Standard and Poor's rating service said it was reviewing Vector's future risk appetite and strategic growth, following the sale announcement.
''The divestment of the Wellington network reduces the business diversity of Vector and marginally weakens the company's business profile. However, these factors should be offset by the company's decision to apply the sale proceeds to reduce debt,'' S&P said in a statement.
The sale, which is subject to approval by the Overseas Investment Office and Vector shareholders, is likely to be completed soon after the end of the 2008 financial year.
As part of its review, S&P would seek clarity on Vector's strategy for future growth, its investment policy for new opportunities, the company's preparedness for any unfavourable regulatory outcome for its Auckland electricity network (due April 2009), and its financial risk appetite.
While there were no specific investment targets at present, Vector had flagged increased infrastructure opportunities for the business. Since the start of Vector's strategic review in early 2007, the company's future direction and business and financial risk appetites had been relatively
less transparent.
''Also, Vector's financial metrics have gradually deteriorated to a point where they are very weak for the current BBB+ rating. S&P would expect these metrics to improve and stabilise over the medium term. If this does not occur, the rating could come under pressure,'' the rating
agency said.
Cheung Kong Infrastructure was reportedly the largest listed infrastructure company in Hong Kong.
Green Party MP Sue Kedgley and New Zealand First MP Doug Woolerton condemned the sale.
Mr Woolerton said overseas bidders were continually lining up to buy assets that were once owned outright by New Zealand taxpayers, ratepayers or consumers and it was a pity to see another one go.
''The loss of energy infrastructure to overseas interests is a blow to the Wellington electricity consumers, whose lines pricing now depends on the whims of a boardroom in Hong Kong. The profits will go offshore and the company will no doubt bring in its own workers from China,
under the Free Trade Agreement, to carry out maintenance work,'' he said.
New Zealanders should own their own energy networks. They were too important to be sold overseas, he said.
Ms Kedgley predicted more expensive power bills for Wellington consumers as the new foreign owners sought to make a profit on their investment.
She expected Cheung Kong Infrastructure to ''suck out'' the profits for offshore shareholders and use the network as a cash cow.
''Why is our Superannuation Fund not bidding for ownership of New Zealand strategic assets like our electricity lines rather than investing in companies which make cluster bombs?''
Vector chief executive Simon Mackenzie said Vector would use the money to retire debt, strengthening its balance sheet and position itself to consider any potential infrastructure opportunities should the arise.
T
he Wellington assets did not sit on sensitive land and the network had already been held twice by foreign owners.
As international infrastructure owners and managers, Cheung Kong Infrastructure had expertise in the industry, he said.
Earlier this month, Government ministers vetoed a bid by the Canada Pension Plan to buy a stake in Auckland Airport, citing a lack of benefit to New Zealand as the key reason for declining the bid. That was despite the Overseas Investment Office recommending the ministers allow
the bid.
