New Zealand's largest electricity generator reveals IPO pricing

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New Zealand's largest electricity generator reveals IPO pricing

(Xinhua) 12:48, September 20, 2013

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The partial sell-down of New Zealand's largest electricity generator Meridian will bring the government at least 1.26 billion NZ dollars (1.05 billion U.S. dollars) in the first of two payment installments, the government announced Friday.

Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall said New Zealand retail investors would pay 1. 50 to 1.60 NZ dollars a share and institutional investors 1.50 to 1.80 NZ dollars a share.

Assuming the government sold a 49-percent shareholding, gross proceeds from the first installment would be 1.26 billion NZ dollars, while total offer proceeds would depend on the final price of the second installment due 18 months later and the mix of retail and institutional investors.

"The government remains committed to putting New Zealanders at the front of the queue for shares," English said in a statement.

The price cap applied only to New Zealanders who apply during the share offer and it guaranteed they would pay no more than 60 NZ cents for their second installment even if large institutional investors paid a higher price.

Meridian, New Zealand's largest electricity generator, using only renewable wind and water resources and producing over 30 percent of the country's electricity, is due to be listed on the New Zealand and Australian stock markets on Oct. 29.

Opposition parties said the government was selling off Meridian in a "fire sale" and undervaluing the company in a bid to carry out a politically-driven sale of state-owned assets.

Earlier this month, opponents to state asset sales initiated the process for a public referendum on the issue with a petition signed by more than 10 percent of eligible voters.

The government's asset sales program originally involved plans to sell up to 49 percent of four state-owned energy companies Mighty River Power, Meridian Energy, Genesis Power and Solid Energy and the country's national carrier, Air New Zealand.

Mighty River was listed in July and shares have struggled to regain their opening price after plunging sharply, while Solid Energy has been removed from the program after running up huge debts.

The petition for a referendum on the sales was tabled in the New Zealand Parliament on Sept. 3, giving the government 12 months from that date to hold a public referendum on the sales.

Although the result of the referendum would not be binding, it could undermine the government's claim to a mandate for the sales.

Public opinion polls have consistently shown overwhelming public opposition to the sales program.