Prime Minister John Key answers questions during his
Dunedin visit yesterday. Photo by Gerard O'Brien.
Prime Minister John Key expects prospective investors in
Genesis will react well to incentives likely to be announced
today by Finance Minister Bill English.
However, Milford Asset Management adviser Mark Warminger said
the deal should be a straight ''vanilla'' equity-raising with
no incentives included.
Genesis is the last of the Government's energy assets to be
partially sold down and responding to questions in Dunedin
yesterday, Mr Key said there would be an incentive for
investors as there had been with Meridian Energy and Mighty
Mr English would release further details in a speech today.
Mr Warminger said Meridian had an instalment component to the
float which confused some retail investors and Mighty River
Power had bonus shares.
''Genesis should be sold on price and with a yield higher
than the others in the sector. It is a small float and with a
good price and high yield it will attract 'sticky'
professional investors. That's how the first two should have
been done,'' he said.
Mr Key defended the asset sales programme, which will fall
well short of the up to $7 billion the Government expected to
raise. Solid Energy, which the Treasury had estimated to be
worth $3 billion, had little oversight and was now a company
of no value.
The partial sale of other energy companies meant the
Government had more oversight, still retained 51% control of
the companies and the partial sales had raised about $4
billion so far.
Asked why he had decided to end the sales programme if it was
so successful, Mr Key said a company had to have the ''right
characteristics'' to be part of the mixed ownership model.
A company like Kordia did not fit as it was too small in
value, and a monopoly, like Transpower, did not fit the
The only other two which could be sold were Television New
Zealand and New Zealand Post and neither was fit for sale.
Labour Party education spokesman Chris Hipkins said Mr Key's
claims Genesis was the last asset sale rang hollow as the
Government was busy privatising facilities across the entire
''In education alone there are five charter schools opening
this year and the Government is now taking applications for a
second round of new privately run schools.''
The Government was also using the reconstruction of
Christchurch schools as an excuse to privatise school
facilities through the use of public-private-partnerships, Mr
At the same time, other state sectors were being privatised,
National had created a private prison at Mt Eden and a new
private prison at Wiri was set to open next year.
Both would be run by ''controversial'' multinational
corporation Serco, Mr Hipkins said.
In the health sector, private hospitals and clinics were
being used for elective surgery because the public health
sector lacked the capacity to cater for the growing health
''These are core duties of the State that National has been
shifting responsibility for to the private sector. Few Kiwis
believe the sale of Genesis spells the end of the
privatisation of vital infrastructure,'' he said.