Pre-registration for shares in Mighty River Power will be open from tomorrow and Kiwis will be first in line, Prime Minister John Key has announced this afternoon.
Cabinet met this afternoon to discuss the first partial sell-down of the state-owned asset following last week's Supreme Court ruling that cleared the way for the 49% sale of Mighty River Power.
Key today confirmed the Government will offer the public up to 49% of Mighty River Power in the second quarter of this year - subject to market conditions.
He said this will begin tomorrow, with the opening of the process for investors to pre-register their interest in finding out more about the Mighty River Power share offer.
Pre-registration for shares will finish on March 22, and anyone interested in Mighty River Power shares will be able to register by website or call centre, both of which will be launched tomorrow.
To buy shares New Zealanders would need to invest at least $1000.
Key said he envisages that, "with the Government's majority shareholding, total New Zealand ownership will be 85-90% of the company after the share offer".
Key said there will be "no games" under the share offer programme, and New Zealanders will be at the front of the queue.
"They will have an opportunity to invest in big Kiwi companies at a time when they are telling us they want to diversify their savings away from property, bank deposits and finance companies."
Labour leader David Shearer said the Government is "selling us down the Mighty River" with its asset sales plan.
He said currently Mighty River Power is 100% Kiwi owned, and this programme will mean New Zealanders lose their assets.
"Kiwis are being asked to purchase what they already own. John Key says he's committing to keeping 85% in New Zealand hands but to do that thousands of Kiwi families will have to spend at least $1,000."
Key said Mighty River Power shares could be 100% New Zealand owned if the demand is there but he says it is not likely.
SOE Minister Tony Ryall said Mighty River Power employees would be guaranteed a minimum of 5000 shares each in the offer if they wanted them.
New Zealanders applying for up to $2000 worth of shares will not be scaled back if the IPO is over-subscribed, Ryall said.
The offer period is expected to open in mid-April and run for three weeks. The share offer document will be available at that time.
Details of a loyalty bonus for New Zealand retail investors will be announced before the offer period starts, Key said.
When the offer period closes, the institutional book-build takes place. Ministers then make share pricing and allocation decisions.
Mighty River Power will then be listed on the sharemarket.
"My expectation is that, subject to market conditions, this process will be completed in mid-May, most likely before the Budget," said Key.
He said the Government will make it as easy as possible for New Zealanders to get access to information, register their interest and apply for Mighty River Power shares.
Key said the Government's share offer programme "is an important policy".
"It is expected to free up $5-7 billion that we can then invest in other assets such as modern schools and hospitals, without having to borrow in volatile overseas markets," said Key.
Finance Minister Bill English said how that money will be spent will be announced in the May Budget.
ONE News Political reporter Jessica Mutch said the Government is spending about $1 million on TV, newspaper and internet advertising and marketing for Mighty River Power shares.
And English said tomorrow there would be the launch of a "substantial" advertising campaign.
Australian Stock Exchange
English said the Government expects the state-owned asset would have a secondary listing on the Australian Stock Exchange.
"There is nothing at all unusual about this - eight of the 10 largest New Zealand listed companies are already dual listed in Australia."
He said there would be a balance and New Zealanders will be at the front of the queue for shares.
He said the dual listing was intended to ensure there was enough "tension in the share price for investors".
Green Party Co-leader Dr Russel Norman said: "Listing on the Australian stock exchange shows the talk of 'mum and dad' Kiwi investors is also rubbish.
"There's nothing in John Key's asset sales plan that would stop shares from going offshore."
Shearer said the programme will ultimately see millions of dollars go into the pockets of private and Australian investors while most New Zealanders lose out.
"The assets will be listed on the Australian stock exchange and open to investment from overseas companies. John Key can't explain how he is going to ensure that at least 70% of the shares go into the hands of New Zealanders, apart from spending $1 million on an advertising campaign."
The Order-in-Council decision was taken to remove Mighty River Power from the SOE Act.
Key told TV ONE's Breakfast this morning that the Government was always confident of winning the court case, and continued to prepare for the sale while it was being heard.
"We were always confident of our position, but of course when things go to court, you are never 100% sure," said Key.
"We are looking forward to taking that company and others to market. I think it will add depth to the New Zealand stock exchange, it does allow us to buy those assets that we want to buy without putting more debt on the balance sheet," he said.
Cabinet is also expected to reveal what is planned in regard to the partial sale of state-owned energy companies Meridian and Genesis Energy today.
The Government plans to raise around $6 billion from asset sales.
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