31 Mar 2014

Claim Genesis shares too cheap

8:18 pm on 31 March 2014

The Green Party has accused the Government of selling Genesis Energy shares too cheaply after stock analysts estimated they are worth much more than $1.55. One has valued the shares as much as $2 each.

030214. Photo Genesis Energy. Genesis Energy logo


The Government set the price of the state-owned asset last week, but Greens co-leader Russel Norman says it represents just another failure in its partial share sale programme.

"The reports from the analyst strongly suggest that the Government has underpriced the Genesis shares, and the reason they've underpriced them, of course, is they want to make it look like it's a success and that there's a lot of demand. But that, of course, means taxpayers have missed out on a lot of money - possibly up to $200 million."

Dr Norman says the Government should not be selling the shares but, at the very least, it should get a good price for them. He believes taxpayers will miss out.

But Prime Minister John Key shrugged off the claim that the shares are too cheap on Monday, saying people need to remember that the share valuations put up by analysts are simply their opinions.

"Like any vendor, we're always trying to make sure that we get the right balance - enough in return for the shares we're selling. But also, ideally, try and get in the position where those who buy shares can benefit over time. Now that's not always the case, but that's what obviously we try and do."

Mr Key says there is very strong demand for the shares and the Government will be able to sell 49 percent of the company.