Prime Minister John Key has confirmed cabinet will decide on the formal go-ahead for the float for Mighty River Power (MRP) later today, including decisions on bonus share issues for retail investors, where it will be listed and the timing of the float.
Key told TVNZ's Breakfast programme the government still planned to ensure 85-90% of the shares would remain in New Zealand hands and that New Zealand investors would be at the 'front of the queue,' but he said a secondary listing in Australia was possible as it was a requirement for many funds managing New Zealand investors' money.
Also, Key confirmed an Interest.co.nz exclusive that the government had asked Goldman Sachs to conduct a strategic review of Kiwibank's capital needs, but that the government had no plans to sell the state-owned bank.
Key was asked if an Australian listing of Mighty River Power would give Australian investors preferential access.
"It may be listed in Australia, but 8 out of 10 big companies are listed in Australia. Some Australian institutions that buy shares on behalf of New Zealanders can't buy them unless there's an Australian listing. So the primary listing in New Zealand, the turnover is in New Zealand, but it's a technical rule they have," Key said.
"We've made a really strong committment. New Zealanders will be at the front of the queue. There'll be strong committments that if New Zealand 'Mum and Dad' investors want to buy they won't be scaled," Key said.
Meanwhile, Key said the government had no intention to include Kiwibank in the mixed-ownership model programme.
"Kiwibank, which is rapidly emerging as the growth business for New Zealand Post, they want more capital from the government. That's been their primary argument for some time, and so Treasury appointed Goldman to go and have a look at the whole business and see where the growth opportunities lie and see whether they're on the right track," he said.
"It's not with a view to sale," he said.
(Details, quotes added)
20 Comments
As I see it (in my slightly anarchic way) all the Opposition politicians have to do is announce that when they come in, they will adjust charges of MRP , Genesis , Meridian to levels which lower share values until they can buy them back for less than they were sold for.
Whoopee!
I odnt think thats likely as they want the incomes to subsidize theirtax expenditure. So I'd expect that lower share values means lower dividends first...
Given the Green's are going to be 10~15% in Parliment for 2014 I'd also expect big pressures to spend like confetti their socail policies are certianly pointing that way and it seems to be drawing voters. Voters who actually show zero interest in green things...
regards
Yep if Labour said they will nationalise the companies if they get back into power, the uncertainty that would create would stop the sale dead in its tracks. However Labour are just as much in awe of the financial markets as National and have yet to renounce their neo liberal ways.
I think Key's talking bollocks on the ASX listing for Mighty River Power. If his government really wants 90% of the shares in NZ investors' hands, especially mas & pas, it doesn't need a secondary listing in Australia. What he really wants is strong demand for the shares to push the sales price up, and good liquidity once they're sold.
The government says it wants to get as many shares in ma & pa hands as possible and get the best price it can. I don't believe it can do both.
Realistically Ma & Pa NZers are net broke as is the country they live in - to accommodate the persistent sale of printed KIWI to buy foreign goods well beyond that which we earn offshore it has to be soaked up by foreign investors.
The stupid voters just fell for the hook or wished to buy a newer car that they didn't earn foreign exchange to pay for - the old "kitchen ATM" story in repeat mode - more so for Auckland property owners.
I agree, though maybe slight difference. Ma and pa's will think the OZ listing will mean they can buy (even at an inflated price) and sell for a quick killing....and hence more $s for National's coffers, end result the shares will be offshore. Given the comments on how poor value existing NZ shares are I'd expect a lot of interest and it over-valued...happy to sit and see how this one goes.
regards
If they wanted 90% of shares in NZers hands and this was simply about creating more depth in capital markets - they would just allocate shares to all those on the electoral roll (the mums and dads that own them anyway) and make the government return by way of increased tax generated from the improved private wealth of the citizenry.
Well yes but think about it. Wealth, risk and responsibility are all transfered to the masses. Think what having the whole nation of end users as being those you were answerable to as a Board of Directors would do for executive accountability. The end of cronyism - decisions would be made in the interests of end consumers or the management would be out in no time. The end of fat salaries for the select few. Returns by way of lower power bills is what the collective would seek - introducing real price competition into the market - something no amount of regulatory oversight has been able to do.
Personally I think the price to earning ratio of all shares to be out of touch with reality. I liken it to gold speculation, ppl buy gold hoping to sell it to others for a profit...I think this share madness is similar.
I dont see/know that there is any such upgrades, power demand is static so projects are being shelved. The Govn has been getting a good return so share holders will expect similar or better, for any power company that is mostly renewables it may prove a long term good bet....anything using fossil fuels...ouch.
regards
For the wider taxpayer community there may be more (expense) to this maori claim. A careful reading of the decision shows it not to be the complete victory JoKey and the media portray: the Supreme Court found that the sale of (MRP) shares is reviewable by the courts (45Q PFA & etc) and that the sale will provide "some" impediment to reparations for Treaty claims- but concluded the CROWN will have the ability to remedy. So, conceivably, the taxpayer will carry the maori risk whilst only owning half the asset - the proceeds from the other half yet disappearing into maori pockets!
Ergophobia
Either way the Govn carries the costs, it just how if there is a cost determined maori are paid out. One option which would have been shares cant be now done, but there are other avenues I dont see that as significant. I suspect it comes more down to greed than anything else....just who is being greedy is the Q.
regards
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