Genesis Energy shares will list on April 17 at $1.55 a share,
at the high end of the value range of $1.35 to $1.65 a share
nominated for the sale of up to 49 percent of New Zealand's
largest electricity and gas retailer by customer numbers.
The issue price was announced this evening at the Beehive by
Finance and State-Owned Enterprises Ministers Bill English
and Tony Ryall following a book-build exercise involving
local and offshore financial institutions, who bid for rights
to up to 40 percent of the company.
The remaining 9 percent will be available for members of the
public to bid for from one minute past midnight on March 29.
Small investors will also be able to access share allocations
through sharebrokers and institutions that gained shares from
The $1.55 share price gives a gross dividend yield in the
2015 financial year of 14.3 percent, based on prospectus
It values 49 percent of Genesis at $736 million and will
bring to a total of $4.7 billion the proceeds from four
partial privatisations undertaken in the last 13 months.
Those sales saw 49 percent of the state-controlled power
companies MightyRiverPower and Meridian Energy sold into
private hands for $1.7 billion and $1.9 billion respectively,
and reduced the government shareholding in Air New Zealand
from 74 percent to 51 percent for a return of $365 million.
They were preceded by attempts through to courts by Maori
interests to block the sales by asserting the need to settle
historical claims under the Treaty of Waitangi relating to
freshwater rights before the sales occurred. The Supreme
Court ultimately rejected those claims.
In all cases, the government remains the controlling
shareholder with 51 percent of the companies held on behalf
Prime Minister John Key has said there will be no more such
asset sales, which his National Party campaigned on at the
2011 election. A citizens initiated referendum last November
found some two-thirds of those who voted opposed the policy.
The policy was initially to have raised between $5 billion
and $7 billion, but the near commercial failure of
state-owned coal miner Solid Energy saw that company removed
from the programme. In the electricity sector, threats to the
long term future of the Rio-Tinto aluminium smelter at Bluff
- the country's largest single power consumer - and
Opposition party policies to dismantle current electricity
market arrangements affected the valuation of MRP, Meridian
and Genesis to an unknown extent.
The government is hoping this last act of the ''mixed
ownership model'' programme will prove more popular with
investors than last May's MightyRiverPower sale, which
attracted some 113,000 individual investors and the Meridian
Energy float in November, which attracted just 62,000
The Genesis offer has generated more positive commentary from
the investment community than the previous two electricity
company floats, in part because the company is offering what
broking firm Forsyth Barr has described as a
''turbo-charged'' dividend yield in the first two years, and
a one-for-15 bonus share offer for shareholders who keep
their stock for at least 12 months.
The government has guaranteed that New Zealanders will own 85
percent of Genesis when it floats on the NZX on April 17,
including the 51 percent it will continue to own, although
there is no prohibition on private shareholders selling
shares to foreign investors following the float.