The Auckland Energy Consumer Trust that owns Vector and the company last night said they were pleased to confirm the IPO would proceed and that a prospectus should be released in June, with Vector listing in late August or early September.

The decision also ends weeks of speculation about alternatives, including possibly selling part of Vector to Australian infrastructure fund Duet.

The IPO, of up to 24.9% of the equity of Vector, could raise up to NZ$700 million and will provide AECT beneficiaries with an opportunity to share in the offer and to benefit from the future growth and success of Vector. It is also likely the IPO will contain an offer to minority NGC shareholders.

AECT chairman Warren Kydd said the trust was pleased to finally end the long-running speculation on Vector's future. Vector chairman Michael Stiassny said he was excited about Vector’s future and looking forward to the listing.

Divisions within the AECT are thought to have prompted Australia's Duet, owned by Macquarie Bank and AMP Capital, to last month bypass Vector and approach the trust directly about a direct asset sale.

It is understood Duet wanted some of Vector's more recent asset purchases, including NGC, but that Stiassny and chief executive Mark Franklin opposed any partial sale to Duet, instead wanting to build a diversified energy and infrastructure firm.

The intent of IPO is to repay a bridging equity financing arrangement Vector had with ABN Amro, to fund the NZ$880 million it paid for the NGC stake late last year. The Vector IPO will be the biggest on the New Zealand stockmarket since the 1999 privatisation of Contact Energy, which raised NZ$1.1 billion.