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State energy selldown to reap $6.8B

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Fri, 06 Jan 2012 12:51p.m.

Prime Minister John Key and Finance Minister Bill English

Prime Minister John Key and Finance Minister Bill English

New Zealand's selldown of state-owned energy companies would gross about $6.8 billion, provided investors agree with the latest valuations by investment banks and research houses.

The valuations, published on the Crown Ownership Monitoring Unit website, are about $2 billion higher than the stock exchange operator, NZX, had assumed in a review of its index methodologies, and are largely unchanged from a year ago.

Forsyth Barr valued Solid Energy at $1.69 billion, Macquarie valued Genesis Energy at $1.76 billion and Meridian Energy at $6.53 billion, while First NZ Capital valued Mighty River Power at $3.63 billion for a total of $13.61 billion.

The Government plans to sell down its holdings to around 50 per cent.

It also aims to reduce its stake in Air New Zealand to about 50 percent from 75 percent, which would net some $220 million based on current pricing. That would leave the newly listed companies accounting for almost 6.4 per cent of the NZX 50 Index's market capitalisation.

Including the Air New Zealand sale, the government would reap $7.03 billion from its asset sale programme, the top of the $5 billion-to-$7 billion range it flagged last year.

Such a figure would net investment banks about $127 million in fees if they get the same percentage as when Contact Energy was privatised in 1999, which is broadly in line with the $100 million indicated by State Owned Enterprises Minister Tony Ryall last month.

Mighty River is poised to be first off the rank with a sale expected in the third quarter of this year, and Genesis will likely be the second company partially privatised.

The Government will be the only investor allowed to hold a shareholding bigger than 10 percent.

NZ

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Comments

23 Jan 2012 10:55a.m.

steve wrote:

simon i have read Shock Doctrine and encourage all who read to read it. Our country is getting raped and our heads are in bush.

18 Jan 2012 05:38p.m.

reece wrote:

aussie here i come

18 Jan 2012 09:34a.m.

Hamish wrote:


We Need a 'DR Ron Paul' for New Zealand!!!

OTHERWISE I'M MOVING TO THE UNITED STATE OF AMERICAN IF RON PAUL WINS!!!

13 Jan 2012 03:11p.m.

John wrote:


That's right Clarke.The blame also lies with those of us who were too lazy to vote. We as people need to wake up to the fact that if we don't defend our own country, our culture, our assets, our very identity as a country and as people is at risk. Unfortunately, we have a media that is not above board.

We Need a Ron Paul for New Zealand...otherwise i'll move there if he wins.

13 Jan 2012 01:41p.m.

Carlos wrote:

Excellent !

12 Jan 2012 08:43p.m.

Proud Kiwi wrote:

That's right Clarke.The blame also lies with those of us who were too lazy to vote. We as people need to wake up to the fact that if we don't defend our own country, our culture, our assets, our very identity as a country and as people is at risk. Unfortunately, we have a media that is not above board.

11 Jan 2012 11:23a.m.

Clarke wrote:

There is absolutely no public support for this sell off. 34 percent of the vote is all John Key and his entire coalition government managed to get from all elligible voters. 34 percent is not a mandate or a moral majority. John Key currently heads the most unsupported (by the people) government in all history. 66 percent of people didnt vote for him... he says some of his voters stayed home... but thats untrue.. he got more votes this time than the last and it was far too close a call for any National party fan boys not to vote. So how does National justify this? they have a technical mandate.... sure its not a real moral mandate... but they will go ahead pretending that they got the votes they needed to do this anyway. An immoral party.

10 Jan 2012 05:48p.m.

Proud Kiwi wrote:

This is an absolute, unashamed,blatant, day-light robbery. It's an absolute mockery of our democracy where the party in power has the cheek to sell national assets which they had no contribution in building. The only thing patriotic about this party is the name.It should actually be International Party. It's about time the law is amended to stop these white collared marauders from plundering the country's assets.

10 Jan 2012 12:41p.m.

Wilbur wrote:

Same whingers with no real answers just like the Labour Party they tend to support! @Bruce...please show me these profits you imagine these SOEs earn! Air NZ is losing a million dollars a day on its international operations and all four of the power companies make small profits compared to the money needed to refit them in around 6 years time. @Paul....I suggest you look at Telecom and what happened when it stopped being State owned for your answers....Thats right it started making a profit. State owned enterprises rarely cost less than privately owned and history shows they usually are poorly run. Of course you are the same people who thought borrowing more money was the answer. I for one will be buying shares in one of the sales. It is a good chance to earn a decent return on my savings.

09 Jan 2012 11:40a.m.

Jan wrote:

The beginning of the end of all ownership... and when those that voted them in this time vote them back in, in three years so they will sell anything else that is left...It's going to be a different life living as tenants in our own Country while corporate's buy up our country for their own ends... This is democracy at its worst.