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No restrictions on who Kiwis can sell SOE shares to, but government still considering loyalty scheme; A lot still to be done, English says
By Alex Tarrant
There will be no restrictions placed on New Zealanders allocated shares in partially privatised State Owned Enterprises regarding who they can sell the shares on to, Finance Minister Bill English says.
But he said that does not mean the government is leaning away from investor loyalty schemes for Kiwis allocated shares in the initial public offerings of the companies, something Treasury still has a lot of work to do on.
Opposition parties have raised concerns that shares allocated to New Zealanders from four partially privatised energy SOEs would just be on-sold to foreign investors, meaning dividend payments would flow offshore.
The government has said it expects 85-90% of the companies to be New Zealand-owned, including its 51% stakes, but this will not be controlled for in legislation to go through Parliament allowing the partial sales of Mighty River Power, Genesis Energy, Meridian Energy and Solid Energy.
English yesterday said that when selling shares in Mighty River Power - the first of the companies to be partially privatised - the government needed to make sure it maintained interest from a number of bidders, as it had to keep in mind the following three floats. Government has received interest from Iwi, KiwiSaver providers and 'mum and dad' New Zealand investors, while there is also interest from prospective foreign buyers for shares in the companies.
The government will set a 10% ownership cap on any one investor in any one company.
English told interest.co.nz the government had already made it clear there would be no 'on-sell' restrictions. He made a comment to Parliament's Finance and Expenditure Select Committee yesterday that the government was "not going to try and control the market" of shares once they were sold off.
English confirmed to interest.co.nz that this did not indicate in any way the government was leaning away from the possibility of having investor loyalty schemes for shares issued initially in the companies.
As well as selling up to 49% stakes in Mighty River Power, Genesis, Meridian, and Solid Energy, the government will also sell down its three-quarter holding in Air New Zealand to no less than 51%, in a bid to raise NZ$5-7 billion for new capital spending over the next five Budgets.
It has already allocated NZ$1.48 billion of this spending, consisting of a NZ$1 billion investment in schools, NZ$400 million on irrigation, and NZ$80 million on a high-tech centre in Auckland.