The Government has confirmed up to 49% of Mighty River
Power will be sold to investors. Photo supplied.
The Government has wasted no time in offering 49% of
Mighty River Power for sale, pre-registration of interest from
investors opening today and the listing likely to be made
before the May 16 Budget.
With the Supreme Court finding in favour of the Government,
Prime Minister John Key confirmed that up to 49% of Mighty
River Power would be sold to the public with the caveat that
the sale was subject to market conditions.
As expected, the Government continued to say that New
Zealanders, including iwi, would be at the front of the queue
when it came to the share allocation.
State Owned Enterprises Minister Tony Ryall said the share
offer had been designed to put New Zealanders first.
Mighty River would be listed on the main board of the NZX,
this listing expected to be its primary stock exchange
Mr Ryall also expected there to be a secondary listing on the
Australian Stock Exchange (ASX).
There was nothing unusual about this. Eight of the 10 largest
New Zealand-listed companies were already dual-listed in
''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.
''On the other hand, we want to ensure there is enough
tension in the share price for investors.''
A secondary listing in Australia would help to achieve that,
Mr Ryall said.
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 website for
pre-registration and for the share offer itself was designed
to restrict people from outside New Zealand from
However, the IPO would be open to some institutional offshore
investors to help ensure New Zealand taxpayers got the best
price for the shares being sold, Mr Ryall said.
The Government expected around 85% to 90% of the shares to be
held by New Zealanders after the share offer.
Finance Minister Bill English said National campaigned on the
asset sales policy at the election in 2011 and it had been
''It has been through the High Court and the Supreme Court,
where the Government has won both cases and now, at last,
it's time to get on with it.''
A substantial advertising and telecommunications campaign
covering television, print and online media would start today
to raise awareness of the IPO (initial public offering) and
tell people how to pre-register their interest.
The campaign would include a strong investor education
element for those unfamiliar with the sharemarket. Mr English
''strongly recommended'' potential investors obtained
independent financial advice.
The price of Mighty River Power shares has not yet been set.
Details of the share offer, including how the price will be
set, will be contained in the offer document, which is
expected to be available next month. What usually happens in
these cases is that institutions indicate what price they are
willing to pay for the shares in a ''book-build'' process. A
range of prices is then decided on, demand deciding where the
price will be in that range.
The minimum application amount will be $1000. New Zealanders
applying for up to $2000 worth of shares will not be scaled
back if the IPO is over-subscribed. A loyalty bonus will
apply for New Zealand retail investors who keep their shares
for a minimum period.
Mr Key said the Government's share offer programme was an
important policy. It was expected to free up $5 billion to $7
billion, which could be invested in other assets such as
schools and hospitals, without the need to borrow in volatile
''From the Government's perspective, it makes sense to use
this opportunity to reorganise the Government's assets and
redeploy capital to priority areas without having to borrow
more. We intend to make it as easy as possible for New
Zealanders to get access to information, register their
interest and apply for Mighty River Power shares.''
What they said
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% to 90% of the company after the
share offer - Prime Minister John Key
The asset sales programme will ultimately see millions of
dollars go into the pockets of private and Australian
investors, while most New Zealanders lose out. Currently, our
state assets are 100% Kiwi owned. This programme will mean
New Zealanders lose their assets. Kiwis are getting asked to
purchase what they already own - Labour leader David
The so-called promise of Kiwi mums and dads being first in
the queue is a transparent exercise in deception. Kiwi mums
and dads are first in the queue now - they own these assets
outright. NZ First will use its influence on the next
coalition government to buy back our state-owned power
companies which are being flogged off by National and we are
committed to buying back the shares at no greater price than
paid by the first purchaser - New Zealand First leader
John Key is ignoring the wishes of those New Zealanders who
overwhelmingly oppose asset sales. The Prime Minister is
always willing to listen to the concerns of SkyCity Casino
but seems unwilling to listen to millions of New Zealanders.
This asset sales programme is about a transfer of wealth from
the public of New Zealand to private interests - Green
Party co-leader Russel Norman
• Pre-registration opens today.
• The offer period is expected to open in mid-April and run
for three weeks. The share offer document will be available
at that time.
• Details of the loyalty bonus for New Zealand retail
investors will be announced before the offer period starts.
• When the offer period closes, the institutional book-build
takes place. Ministers then make share pricing and allocation
• Mighty River Power is then expected to list on the NZX and