Genesis Energy's Tekapo B station. Photo supplied.
The Government has opted to sell 49% of Genesis Energy,
in the last of its state-owned enterprise partial sell-offs.
Finance Minister Bill English announced up to 490 million
shares, or 49% of Genesis, would be put up for sale, starting
today with broker and institutional book building, while
holding 90 million shares, or 9% of Genesis, for small ''mom
and pop'' investors.
However, Labour and the Green Party labelled the 40% offer to
institutions an opportunity for them to ''make a killing''
and only New Zealand's ''wealthiest'' would be able to afford
the share offer, underpinned by an offer of bonus shares
later costing millions.
The Government had indicated a selling range of 30%-49% of
total shares, and Craigs Investment Partners broker Peter
McIntyre said the Government had probably opted for the top
end, following positive feedback from brokers.
''It is hard to find opportunities in the New Zealand market.
This yield will be very appealing to investors,'' he said.
Based on Genesis shares selling in a range between $1.35 to
$1.65, the estimated gross dividend yield in full-year 2014
is 10.8%-13.2, then for 2015, rising to between 13.5%-16.5%.
Mr McIntyre said the ''supercharged'' dividend was boosted by
Genesis having the largest share of the country's retail
electricity and gas market, and a 31% stake in the income
stream of the Kupe oil field, estimated to have a lifespan to
On the question of ''just'' 9% of Genesis being offered to
''mom and pop'' investors, he said they would also be able to
purchase shares from brokers' allocations.
Labour leader David Cunliffe said the most the Government
could get out of the sale was $800 million, claiming it was a
$300 million discount on Genesis' value.
''Institutions will make a killing out of that. Even with the
best price possible from Genesis, they will fall short of
their promised $5 billion-$7 billion,'' of overall returns
from the SOE sales, he said.
Greens co-leader Dr Russel Norman said the bonus aspect of
the share offer would cost up to $9 million. Investors
holding shares for a year get one bonus for every 15, capped
at 2000 bonus shares.
''Despite National selling Genesis on the cheap and spending
millions on bonus shares, only a fraction of the population
will buy shares,'' Dr Norman said.
The book-build opens to institutions and brokers today, and
the final share price will be announced tomorrow. On
Saturday, the offer opens to the general public. It closes on
April 11, with Genesis to list on the stock exchange on April