Clayton Cosgrove
Spokesperson for SOEs

David Cunliffe
Spokesperson for Economic Development

5 April 2012 MEDIA STATEMENT
Sale Of Genesis Makes No Sense

Genesis Energy Chair, Jenny Shipley, today confirmed partial privatisation would not improve Genesis’ performance, Labour’s spokesperson for State Owned Enterprises Clayton Cosgrove and Labour’s Economic Development spokesperson David Cunliffe say.

“In testimony to the Commerce Select Committee Annual Review, Jenny Shipley noted Genesis already has full continuous disclosure obligations pursuant to an existing corporate bond,” Clayton Cosgrove said.

“When I asked if privatisation would improve Genesis’ performance, Mrs Shipley replied; ‘It would not alter how we performed’,” Clayton Cosgrove said.

The timing of the proposed sale was also questioned by Labour members.

“Genesis acknowledged that in the past year net profit after tax had collapsed from $67 million to a loss of minus $16.6 million, partly as a result of write-downs following the Government’s imposed Tekapo A and B asset swap,” David Cunliffe said.

“Genesis had not paid a dividend in 2010/11 and would not do so in 2011/12. Genesis is in breach of its Statement of Corporate Intent (SCI), the chair confirmed today.

“It had also breached SCI conditions in relation to health and safety and RMA performance. This combination of factors has obviously impacted financial and SCI performance.

“Even if an owner wanted to sell, surely this is a very unwise time to do so,” David Cunliffe said.

“Jenny Shipley has quite rightly told the Committee there is no upside to the sale and the timing of this sale makes no sense,” Clayton Cosgrove said.

labour.org.nz

ENDS

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