By Alex Tarrant
The government is positioning itself to inject new capital into Kiwibank over the next three years, with that likely to come from the proceeds of its partial privatisation programme.
Budget 2012 tables included a new unquantified specific fiscal risk relating to the government’s investment in the State-owned bank. Kiwibank parent New Zealand Post is becoming increasingly capital constrained due to falling revenues.
“Kiwibank has indicated that it may require new equity within the next three years mainly to meet the Basel III regulatory capital requirements,” Treasury said in Budget 2012.
“New Zealand Post is reaching constraints in its balance sheet to support Kiwibank,” it said.
It is widely thought Kiwibank needs at least NZ$200 million in new capital over the next few years.
From asset sale proceeds
Any capital injection into KiwiBank is likely to come from the proceeds of the sell down of four state-owned energy companies and the government’s holding in Air New Zealand.
The government is expecting to raise between NZ$5-7 billion over the next five years from the 49% sales of MightyRiverPower, Genesis Energy, Meridian Energy and Solid Energy. It is also looking to sell-down its three-quarter holding in Air New Zealand to no less than 51%.
(Updates with video of English)
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