Potential long-term investors in Mighty River Power
should document their intentions in case their circumstances
change and they need to sell, WHK tax principal Scott Mason
With more than 290,000 people pre-registering for the shares
in the state-owned enterprise, it was likely some were
looking at a quick capital gain and others were wanting to
receive incentives to be offered for holding the shares for
the longer term.
''My pick is that because of the incentives to hold, the
issue will be oversubscribed by a substantial chunk as people
hold on to their shares.
''Post issue, the market could shoot up quickly and drive
people to change their views on holding. They may have bought
to hold but feel they are better off to sell.''
Trusts or companies buying the shares could pass a resolution
indicating their intentions to hold the shares for the
long-term and individuals could make a note of any discussion
they had with their sharebroker, Mr Mason said.
That would indicate to the Inland Revenue Department that
although that was the intention, circumstances had changed.
It was difficult to retrospectively document intentions, he
The Otago Daily Times has been contacted by readers
asking about the pre-registration site, particularly where
the box needs to be ticked that ''you are not in the United
States nor are you acting for the account or benefit of any
person in the United States''.
Brokers contacted yesterday are still not allowed to talk
publicly about the partial sale of the state-owned enterprise
but believe the phrase is being used because Mighty River
Power's prospectus has to be registered under United States
securities laws on account of the fact the company has
thermal generation assets in the US.
The strict rules around the partial listing means brokers are
restricted about what they can tell their clients about the
deal and how they go about contacting them.
A record number of people have pre-registered to buy Mighty
River Power shares.
As of noon yesterday, 290,659 had signed to take part in the
Government's partial sell-down of the power company.
That is nearly 50,000 people more than the number who signed
for Contact Energy's float in 1999.
There are still two weeks to run before the pre-registration
Those who sign up do not have to commit money now, but are
being offered the chance to gain up to 25% more shares if the
offer is oversubscribed and has to be scaled back.
An offer document for the float is expected to become
available in mid-April, ahead of its listing in May.