New Zealand electricity SOE set for controversial trans-Tasman listing
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E-mail Xinhua, March 4, 2013
The New Zealand government is expecting to have the first of a series of controversial partial privatizations of its state-owned energy sector completed by mid- May, Prime Minister John Key said Monday.
The sale of up to 49 percent of the Mighty River Power electricity generating company would begin Tuesday with the opening of a process to allow investors to pre-register an interest until March 22, Key said in a statement.
The process follows the failure last month of a legal bid by the indigenous Maori Council to claim ownership rights over the water used by hydroelectric plants
"The government's share offer program is an important policy. It is expected to free up 5 billion to 7 billion NZ dollars (4.11 billion to 5.75 billion U.S. dollars) that we can then invest in other assets such as modern schools and hospitals, without having to borrow in volatile overseas markets," said Key.
He said New Zealanders would "be at the front of the queue" for shares, allowing them to diversify their savings away from property, bank deposits and finance companies.
Details of a loyalty bonus for New Zealand investors would be announced before the three-week offer period started in mid-April.
"The Mighty River Power share offer has been designed to achieve widespread New Zealand ownership. We envisage that, with the government's majority shareholding, total New Zealand ownership will be 85 percent to 90 percent of the company after the share offer," said Key.
After the offer period, the government would decide on the share price and the allocation of shares.
Minister for State Owned Enterprises Tony Ryall said Mighty River Power would apply to be listed on the New Zealand Stock Exchange (NZX), but it could have a secondary listing on the Australian Stock Exchange.
"There is a balance to be struck here. On the one hand, we have given New Zealanders an absolute commitment that Kiwis will be at the front of the queue for shares," Ryall said in a statement.
"On the other hand, we want to ensure there is enough tension in the share price for investors. A secondary listing in Australia will help to achieve that," he said.
"Another point worth noting is that some Australian institutions, under their own investment mandates, would not be able to invest in Mighty River Power unless it was also listed in Australia."
The minimum application for shares would be 1,000 NZ dollars, he said.
Opposition political parties said New Zealanders were being asked to purchase assets they already owned and the proposed Australian listing confirmed fears that ownership would eventually go offshore.
"The assets will be listed on the Australian stock exchange and open to investment from overseas companies. John Key can't explain how he is going to ensure that at least 70 percent of the shares go into the hands of New Zealanders," leader of the main opposition Labour Party, David Shearer, said in a statement.
More than 80 percent of New Zealanders had consistently said they were against asset sales and 390,000 people had signed the petition calling for a referendum, he said.
Green Party co-leader Russel Norman said the government was holding public opinion in contempt.
"There's nothing in John Key's asset sales plan that would stop shares from going offshore," Norman said in a statement.
"In fact, Treasury advised the government to facilitate foreign buyers to create 'pricing tension' that is, force up the price for New Zealand investors." Endi
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