The law allowing the partial sale of Mighty River Power, Genesis Energy, Meridian Energy and Solid Energy was passed in Parliament on Tuesday afternoon after government and opposition MPs had one final chance to debate the Public Finance (Mixed Ownership Model) Amendment Bill.
The government is set to sell up to 49% of those four energy companies, as well as sell down its three-quarter stake in Air New Zealand to no less than 51% in a bid to raise NZ$5-7 billion over the next five years.
The money raised from the share sales would be spent on new capital expenditure, with a NZ$250 million upgrade to KiwiRail's network first in the gun. Other spending commitments already made include NZ$1 billion on school upgrades and NZ$400 million for co-investment in irrigation schemes.
Mighty River Power is set to be the first energy company to be partially privatised before the end of September. Genesis or Meridian are set to be second (with the other third), and Solid Energy fourth.
Earlier on Tuesday Prime Minister John Key said the government would make it as easy as possible for New Zealanders to buy shares sold in the companies. Meanwhile, Finance Minister Bill English said while it was unlikely share parcels would be held back for Treaty of Waitangi settlements, that scenario was possible.
Minister for State Owned Enterprises Tony Ryall kicked off debate during the third reading on the Bills (see video below), which also included the State-Owned Enterprises Amendment Bill.
Both bills passed by 61 votes to 60 - National (59 votes), ACT (1 vote) and UnitedFuture (1 vote) voted in favour of the bill. Labour (34 votes), the Greens (14 votes), New Zealand First (8 votes), the Maori Party (3 votes), and the Mana Party (1 vote) voted against the bills.
Ryall's office put out this release on the bills:
A bill enabling the Government to offer New Zealanders minority shares in four energy SOEs has passed its third and final reading in Parliament today.
“This is part of the National Government’s wider economic plan to control debt and keep investing in our economy,” State Owned Enterprises Minister Tony Ryall says.
“Ministers will make a decision in due course whether to proceed with the sale aiming to commence the offer in the third quarter of 2012, market conditions allowing.
“Commercial work on the Initial Public Offer has been underway for some time including the process for selecting a retail syndicate – usually brokers and/or banks - which will be tasked with marketing and selling the offer to every day New Zealanders. The syndicate will support the Government’s goal to make it as easy as possible for New Zealanders to take part.
“We expect strong New Zealand interest. Current international economic uncertainty may see more interest in the government share offers as local investors stay home rather than invest overseas, and as they look to invest in known infrastructure businesses such as the electricity sector.
“The National Government has been upfront about its plans to offer New Zealanders minority shareholdings in government owned businesses, as part of a wider plan to protect and grow the New Zealand economy.
“We took that clear plan to the country and New Zealanders voted for us in overwhelming numbers.
“The share offers will help to control debt, increase opportunities for New Zealanders to save, and deepen capital markets.
“And, over the next 3 to 5 years the around $6 billion in proceeds from these share offers will pay for essential new public assets like modern schools and hospitals through a new Future Investments Fund – that is $6 billion we would otherwise have had to borrow from overseas lenders and pay significant interest on. That is $6 billion off our national debt.
“We have strict ownership limits and these are now enshrined in legislation. The government will retain at least 51 per cent control and there will be a 10 per cent share cap on all other investors. We have also set a target of 85-90 per cent New Zealand ownership at the time of the offer.
New Zealanders wanting more information can visit the website: www.governmentshareoffers.