The company says it now wants the pro-rata compulsory cancellation of three in seven shares for a cash payment to shareholders of $NZ1.58 per cancelled share, making a total of $NZ525 million it planned to return to shareholders.

Earlier this year it had proposed a $NZ475 million return based on the same compulsory cancellation of one in three $NZ1.84 shares.

Chairman Greg Martin said that following further financial analysis, taking into account NGC's continuing strong cash position, the directors decided to increase the total proposed capital return. To ensure all shareholders were treated as equally as possible for tax purposes, the cancellation ratio and price had been altered to reflect recent NGC share prices.

NGC expected to lodge Scheme of Arrangement application documents with the High Court before the end of August and was also seeking Inland Revenue Department confirmation of the tax treatment of the proposed return.

Martin added that NGC took a medium to long-term view of its investment program and, as demonstrated in its recent announcements relating to the development of its metering and gas trading businesses, continued to successfully identify opportunities to expand its core businesses.

These opportunities did not contain significant capital requirements beyond those generated from operating cash flows. NGC is to fund part of the return from a proposed $150 million five-year retail bond issue to be completed in late November-early December.