High demand tipped for partial SOE sell-off

Bill English
Bill English
New Zealand's growing pool of investment funds should mean there will be a strong demand for the Government's $5 billion to $7 billion partial sell-off of some state owned enterprises (SOE's), says Finance Minister Bill English.

The Government expects New Zealanders to own at least 85 to 90 percent of the SOE's included in the partial sell-off.

Mr English said there were a number of strong reasons for expecting a high level of demand from New Zealand investors, who currently had $300 billion of investments, these included the 34 registered KiwiSaver providers, financial institutions outside Kiwisaver, Crown financial institution and Iwi.

"The mixed ownership model is a win-win. New Zealand savers get to invest in good Kiwi companies. And the Government frees up $5 to $7 billion over three to five years to buy new assets like schools, hospitals and ultra-fast broadband, without having to borrow from overseas lenders and increase our debt," Mr English said.

He said the Government would rather pay dividends to New Zealanders than interest on rising debt to foreigners.

As part of the sell-off the Government would maintain a majority controlling stake of at least 51 percent of the SOE.

"We have also promised that New Zealanders will be at the front of the queue for shares."

Final arrangements for the partial sell-off would be made next year, after the Government took the policy to voters in the election, he said.

"But it's the Government's intention to impose a maximum shareholding cap on the mixed ownership companies. That cap is most likely to be 10 per cent."

Mr English earlier said the Government wasn't considering any partial sales -- which it calls mixed ownership -- beyond Mighty River Power, Meridian, Genesis and Solid Energy and reducing its shareholding in Air New Zealand.




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