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| NZX Carbon Business Sells Off Registry | | Jan 29 2009 | |
NZX Ltd is selling off its wholly-owned registry business, TZ1 Registry, to Markit, a global financial information services company based in Britain.
TZ1 Registry records carbon credit generation, purchase and retirement as an arm of the wider TZ1 carbon market business that the NZX announced with a hiss and a roar in 2007.
The sell-off is expected to be signed off over the next two months, subject to relevant board approvals and completion of bilateral due diligence, Reuters reported.
Markit is a leading provider of data, valuations and trade processing services for the over-the-counter (OTC) markets, including the OTC commodities markets.
The company is credited with increasing transparency and reducing risk in the OTC markets.
NZX chief executive Mark Weldon - a major advocate for the TZ1 business - said NZX considered retaining TZ1 as a subsidiary, but "the opportunity to cement a transaction with Markit that retained a meaningful economic interest for NZX in the TZ1 Registry business, and to combine that with Markit's global reach and distribution networks, was compelling".
Under the terms of the proposed transaction, NZX will sell Markit 100 per cent of the shares of TZ1 in exchange for consideration payable in Markit shares.
While the transaction's structure would deliver short- and medium-term value to NZX, he believe the exchange could also derive "ongoing value" from the Markit relationship.
Lance Uggla, chief executive of Markit, said, "In order for the market to trade environmental products, standards need to be set, and information provided to market participants by a trusted source".
He predicted that Markit would be able to facilitate the next important stage in the company's growth and help markets to develop further by increasing transparency in the environmental markets."
Markit executive vice president Niall Cameron said TZ1 had created a world-class brand in environmental credit registries and TZ1 Registry chief executive Helen Robinson said: "This is a great business, and we are excited to see it go to the next level".
TZ1 - branded for the time zone in which New Zealand has the first set of financial markets to open each day - was set up by a consortium of companies as an Asia-Pacific exchange to trade carbon credits.
Senior executives from New Zealand's biggest business, Fonterra and other companies such as Air New Zealand, put together a feasibility report on the business for the former Labour Government.
Carbon markets buy and sell credits or "emissions units", and an important part of limits on the production of greenhouse gases.
The world's growing carbon market, worth more than $US60 billion ($A90 billion) a year, lets firms or nations buy and sell greenhouse gas emissions offsets to meet both voluntary and mandatory targets.
In July last year, TZ1 announced that it had been appointed as a global provider of registry services to the voluntary carbon standard (VCS) market, and a month later it was appointed as a global registry for the Malua Wildlife Habitat Conservation Bank (biobank).
It listed 1.36 million biodiversity conservation credits from a forest project in the Malaysian state of Sabah on Borneo island, initially selling credits at $US10 each.
TZ1 had 12 new customers sign on to its registry during the third quarter of 2008, and said annualised revenue from those customers was expected to be around $NZ400,000 ($A320,461.46).
TZ1 chief executive Mark Franklin, said at the time that despite the impact of the global recession on carbon markets, players remained focused because carbon trading was simply the way of the world.
He pointed to a need for developing emissions trading schemes (ETS), such the one planned in New Zealand, but since then the National Government has won the election and put the Labour administration's ETS on hold while it conducted a complete review.
© 2009 NZPA |
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