By Bernard Hickey
Mighty River Power and its shareholder the Government have registered their offer document for an Initial Public Offering and float on the NZX, including an indicative price range of NZ$2.35 to NZ$2.80 per share and plans to offer retail investors one bonus 'loyalty' share for every 25 shares they hold on to for
25 2 years.
That price range implies an indicative market capitalisation of NZ$3.29 billion to NZ$3.920 billion, which means the government could raise around NZ$1.8 billion of the NZ$
7-9 5-7 billion target for its 'Mixed Ownership Model' SOE float programme.
Also included in the offer is a "participating Iwi offer", through which a pool of NZ$65 million of shares, representing approximately 1.8% of the shares on issue, has been reserved for allocation to iwi that have unsettled Treaty of Waitangi claims. Shares that aren't taken up by Iwi will be offered for sale in the general offer.
And in the general offer the final price will be set on May 8 after the retail offer has closed and an institutional offer has been held through a book build process.
The loyalty scheme is available only to New Zealand retail investors. It is not open to institutions or overseas investors.
The offer is expected to open on April 15 and be open until Friday May 3, one week before the company is expected to list on May 10.
The government is selling 686 million shares or 49% of the company in the float.
Retail investors can buy a minimum of NZ$1,000 of shares with multiples of NZ$100 above that.
Applications from New Zealanders of up to NZ$2,000 from New Zealanders will not be scaled. If there is scaling back, those who pre-registered (440,000) will receive 25% more shares than those who did not pre-register.
The bonus share offer is for up to a maximu of 200 bonus shares for each New Zealand applicants.
The offer document included a long list of risks, including the potential reduction or closure of the Tiwai Pt smelter.
"If the Tiwai Point Aluminium Smelter were to significantly reduce its electricity consumption or cease consumption altogether, the resultant drop in demand could lead to a sustained reduction in electricity prices in general," the offer document said.
Institutional investors will pay the same price as retail investors. Allocations will be set after May 10.
(Updated with more detail from offer document, corrects amount to be raised from MOM programme to NZ$5-7 bln from NZ$7-9 bln, corrects first paragraph 25 years to 2 years)
Additional material added by David Hargreaves