16 Apr 2014

68,000 buy shares in Genesis

9:54 pm on 16 April 2014

Finance Minister Bill English has shrugged off concerns the Government might have sold shares in Genesis Energy too cheaply.

Finance Minister Bill English.

Finance Minister Bill English. Photo: RNZ / Demelza Leslie

The state-owned company will be listed at 1pm on Thursday, with more than 68,000 retail investors having bought the shares.

Investors wanting more than $40,000 worth of shares are getting only $5000 worth, as there are not enough to meet demand. Broker allocations were cut by 20 percent.

Mr English said on Wednesday that Genesis would have the third largest New Zealand share register when it lists. The two bigger companies are Contact Energy, which was privatised in the late 1990s, and Mighty River Power (MRP).

The minister acknowledged that, given the interest from smaller investors, the Government might have got more than the set price of $1.50 cents for each Genesis share.

"With MRP it looked like taxpayers had done very well at the expense of private investors who still haven't got back to the price that they paid some six or eight months ago. So you win some, you lose some."

Mr English said in other share floats the Government had been criticised for charging too much, and he is happy with the sale.

"The interest in Genesis, though, does prove that we were right to persist with the sale at a time when most people were saying that we shouldn't try and sell it."

At the time of listing, Genesis would be 88 percent New Zealand-owned.

The Government has retained 51 percent ownership of the company, while New Zealand retail investors will hold 26.7 percent, New Zealand institutions 10 percent and overseas institutions 12 percent.

The partial sale of Genesis has raised $733 million and brings the proceeds of the Government's asset sale programme to $4.668 billion.