5 Mar 2013

Big interest in Mighty River share offer

9:55 pm on 5 March 2013

Tens of thousands of people have registered their interest to buy shares in Mighty River Power.

The Government has opened a three-week period during which New Zealanders can register for more information on the partial sale of the State-owned energy company.

Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall officially launched the share registration in Auckland on Tuesday and by 5pm some 35,000 people had lodged their interest.

For next three weeks, potential investors can register their interest either online or by ringing a call centre. Pre-registration is only open to New Zealand citizens or residents who have an Inland Revenue number, a New Zealand bank account and a New Zealand address.

A minimum of $1000 must be invested. Anyone wanting up to $2000 worth of shares will be able to buy that amount, but may find their application scaled back if the offer is over-subscribed.

Mr Ryall said those who apply for up to $2000 worth of shares will be guaranteed that amount, but if shares are in high demand, the amount people can buy will be scaled back.

"If demand for the offer exceeds supply, then people won't get what they asked for. But the person who pre-registered will get up to 25 percent more than the person who didn't pre-register."

Registering for shares is not an obligation to buy them. Mr Ryall said people could apply to buy shares when the offer opens in mid-April.

Finance Minister Bill English said it is the largest share offer of a New Zealand company since the Contact Energy float in 1999. Up to $1.4 million is being spent advertising the offer and people can pre-register their interest in buying the shares until 22 March.

The Mighty River Power share registration website experienced technical problems on its first day, buckling under the pressure of people wanting to get in early.

Investors reported early glitches and slow connection speeds while trying to pre-register on Tuesday. The Treasury, which administers the site, said it is investigating the problems.

Opposition parties critical

The Government has said it would wait until it knows the level of interest from New Zealand investors before announcing how a loyalty bonus system would work.

But New Zealand First leader Winston Peters criticised this on Tuesday, saying the Government is making it up as it goes along.

"If you're going to talk about and boast about a loyalty scheme to encourage New Zealanders, surely you'd know what the details were. And they've had a long time, pending the court's decision at the Supreme Court level, to have got these things ready."

Mr Peters said the Government needs to inform New Zealanders about the process, rather than keeping them in the dark.

Labour Party leader David Shearer said on Tuesday the Government is going to desperate lengths to get people on board the Mighty River Power share float.

"The Government wants to be able to stand there and say, look lots of people have put their hand up to put their money into SOEs. They are so desperate to want to do that, that they are putting up these incentives."

Mr Shearer believed very few New Zealand families will have the money to buy shares.

Green Party co-leader Russel Norman said whatever happens, New Zealand ownership of the shares would be diluted.

Investment nous urged

Finance Minister Bill English says people should be thinking about their financial investments - not political opinions - when it comes to buying shares in Mighty River Power.

Mr English told Radio New Zealand's Morning Report programme on Tuesday the Government wants to retain enthusiasm for future sales of State-owned assets by encouraging the retention of shares in New Zealand hands.

The Government aims to have up to 90% of Mighty River Power retained in New Zealand hands, between the Government's 51% share and domestic investors.

Prime Minister John Key said on Monday that the Government would do all it can to ensure that Mighty River still has a very high level of New Zealand ownership.

Mr Key said the shares should be listed on the New Zealand and Australian stock exchanges in time for the Budget on 16 May. The Government would allocate the shares, but who is willing to buy them is up to the market, he said.

The Government also plans to go ahead with the partial sales of Genesis Energy and Meridian Energy, but no announcements on the timing of those have been made.