The Government says shares in state-owned power generator
and retailer Genesis Energy will be priced in a $1.35 to $1.65
range and will include a one for 15 loyalty bonus share offer
as a sweetener for New Zealand investors.
The proportion of shares to be sold would be announced on
March 26, Finance Minister Bill English said. The Government
has previously said it will sell between 30 and 49 per cent
of Genesis Energy.
Based the indicative price range, prospective 2015 financial
year implied gross dividend yield was forecast to range from
13.5 per cent to 16.5 per cent. Genesis is expected to list
on the NZX on April 17.
The bookbuild will take place on March 27 and March 28 and
the final price will be announced on the night of March 28.
English said that to encourage New Zealand investor
participation, New Zealanders who bought shares and who held
them for 12 months would be eligible for one loyalty bonus
share for every 15 shares held, with a cap of 2000 bonus
"The process will allow the Crown to determine the expected
demand from the various investor pools, at which point we
will decide and announce the level of sell-down for the
bookbuild process," State Owned Enterprises Minister Tony
Ryall said in a statement.
The loyalty bonus share issue is more generous than the one
employed for last year's float of Mighty River Powe, which
involved a two-year wait for bonus shares, issued at a ratio
of one-for-25. The Meridian offer involved instalment
Chairman Jenny Shipley, asked at a news conference about her
ability to serve the company after her previous involvement
as chairman of failed company, Mainzeal, said she continued
to enjoy the support of government ministers.
"I am very proud to be chairman and continue to enjoy the
support of the ministers," Shipley said, adding she intended
to continue in the role.
Chief executive Albert Brantley said he believed investors
would be "pleasantly surprised" on closer examinatoin of
Genesis Energy, which has been variously described as being
the "runt of litter", or the "ugly duckling", of the state's
He said the company was a truly diversified business, capable
of coping with a range of wholesale electricity market
In addition, it had the largest customer base of any of the
so called generator/retailers.
The company's investment statement forecast a net profit of
$41.8 million for the year to June 2014, more than doubling
to $95.4 million in the June 2015 year.
The difference reflected a number of one off charges taken in
the current year, combined with weak wholesale powers prices
brought on by unusually high rainfall over 2013.
The documents cited uncertainty over the future of the Tiwai
Point aluminium smelter as a risk, and the Labour-Green plan
to re-regulate the power market, as being possible future
risks to its profitability.
Genesis has the Huntly thermal gas and coal power station,
the Tongariro power scheme, Waikaremoana power scheme, and
Takapo dams A and B.
It also has a 31 per cent stake in the Kupe oil and gas
- by Jamie Gray, APNZ