26 Mar 2014

Govt coming clean on Genesis - Greens

8:23 pm on 26 March 2014

The Government is finally coming clean on how few of the shares from its energy company sales go to ordinary New Zealanders, the Green Party says.

Genesis Energy's Tekapo B Power Station.

Genesis Energy's Tekapo B Power Station. Photo: GENESIS ENERGY

The Government on Wednesday announced it would sell 49 percent of Genesis Energy, with shares being offered in two lots; on Thursday, 400 million shares will be made available to New Zealand sharebrokers and domestic and international institutions, while 90 million will go on sale to New Zealanders on Saturday.

Shares in the company are being valued at between $1.35 and $1.65 each, with the final share price offer to be announced on Friday evening.

Green Party co-leader Russel Norman said the two-part offering showed how few people could afford to buy the shares.

"Most households are under enormous pressure. They simply don't have spare cash to buy shares in these electricity companies, and that's reflected in the fact that only 9 percent of the shares are being put aside for retail investors," Dr Norman said.

The Government had previously said it could sell as little as 30 percent of Genesis but State Owned Enterprises Minister Tony Ryall on Wednesday said the decision to go with 49 percent was based on market feedback.

"The information that we've got back from Treasury and our financial advisers is that there is positive feedback on the offer from local and international institutions, (and) New Zealand sharebrokers," Mr Ryall said.

"So that allows us to have this confidence that we are looking to sell up to 49 percent of Genesis."

Mr Ryall rejected speculation from Labour it would use money from the sale to bail out telephone lines company Chorus, which has said it will be unable to deliver on its ultra-fast broadband contract because of coming changes to what it could charge for its services.

"I'm ruling it out. The Government's been quite clear. We're not going to put additional money into Crown fibre holdings for a bail out of Chorus. There is negotiations between the two," he said.

The general offer for Genesis Energy closes on 11 April and it will be listed on the stock exchange on 17 April.