Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ plans to list Genesis Energy in April

NZ plans to list Genesis Energy in April after partial sale aimed at increasing pricing tension, English says

By Tina Morrison

Feb 26 (BusinessDesk) – New Zealand’s government will sell down 30 to 49 percent of its holding in Genesis Energy and list the power company on the nation’s share market in April, marking the end of its spate of partial asset sales over the past year as a general election looms.

Genesis shares will be priced at the start of the initial public offer period in March, in what is known as a front-end bookbuild, Finance Minister Bill English said in speech notes for delivery in Auckland today. That will provide more certainty for investors and allow sharebrokers to bid for the stock at the same time as institutional investors, creating stronger competition, English said.

New Zealand’s government has previously said it expected to reap between $700 million and $1.1 billion from the sale of 49 percent of Genesis, following on from last year’s partial privatisation of MightyRiverPower and Meridian Energy, and a reduction in its holding in national carrier Air New Zealand. So far, the government has raised about $4 billion, reducing its overseas debt requirements and helping fund schools, hospitals and faster broadband, English said today.

“The government won’t be selling any more shares in state-owned enterprises or mixed ownership companies – either this term of after the election,” English said, reiterating earlier comments by Prime Minister John Key. “We’ve achieved what we wanted to with the share offers in energy companies and Air New Zealand.”

The remaining state-owned enterprises are a combination of small entities, natural monopolies or companies in sectors that are unsuitable for future share offers, English said.

The government anticipates that selling a smaller stake in Genesis in a front-end bookbuild could increase the price by offering fewer shares to more bidders, English said. A decision on how much of the company is to be sold will be made ahead of the offer.

Genesis is the country’s largest power company by customer numbers but the smallest of the partial privatisations by asset value. New Zealand retail investors in Genesis will be offered loyalty bonus shares and a simpler investment statement detailing the offer, English said.

MightyRiverPower listed in May at $2.50 and recently traded at $2.06. Meridian’s instalment receipts listed in October at $1 and recently traded at $1.055.

Last week, Genesis reported a 23 percent slide in first-half earnings to $150.5 million, reflecting stiff retail competition and a warm winter, which meant hydro-storage was above average and wholesale prices were lower.

The partial privatisation programme has had mixed success after an opposition proposal to overhaul the electricity market saw traders discount the value of the power companies, accompanied by growing recognition that New Zealand has excess generation capacity that may last some years, keeping a lid on prices.

A general election has to be held this year.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news