Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Next steps in Mighty River Power IPO

Hon Bill English
Minister of Finance

Hon Tony Ryall
Minister for State-Owned Enterprises

4 March 2013

Next steps in Mighty River Power IPO

Finance Minister Bill English and Minister for State Owned Enterprises Tony Ryall will tomorrow officially launch the pre-registration period for New Zealanders who are interested in finding out more about the Mighty River Power share offer.

“National campaigned on this policy at the election in 2011 and it has been extensively discussed before and since then,” Mr English says.

“It has been through the High Court and the Supreme Court where the Government has won both cases and now, at last, it’s time to get on with it.”

Mr English says the initial public offering of up to 49 per cent of the Government-owned power company is an opportunity for New Zealanders, including those who have not owned shares before, to invest in the stockmarket.

The announcement that the pre-registration period will begin tomorrow is one of the decisions confirmed by Cabinet and announced today. Pre-registration will allow New Zealand retail investors who are interested in finding out more about Mighty River Power shares to register their interest.

“Tomorrow will also see the start of a substantial advertising and communications campaign covering television, print and online media which will raise awareness of the IPO, and tell people how to pre-register,” Mr English says.

“That campaign will include a strong investor education element for those unfamiliar with the sharemarket. We strongly recommend investors obtain their own independent financial advice.”

Ministers also announced today that they expect that the share offer document will be lodged shortly after the pre-registration period ends and that there will be a three-week offer period.

At the end of that, the book-building process will take place before ministers decide on the share price and the allocation of shares. Those decisions will include how the shares will be allocated between New Zealanders and overseas shareholders.

The Government expects this process to be completed in mid-May.

The share offer had been designed to put New Zealanders first, Mr Ryall says.

“Mighty River Power will apply to be listed on the NZX main board. We expect that its primary stock exchange listing will be in New Zealand.

“We also expect it to have a secondary listing on the Australian Stock Exchange. There is nothing at all unusual about this – eight of the 10 largest New Zealand listed companies are already dual listed in Australia.

“There is a balance to be struck here. On the one hand, we have given New Zealanders an absolute commitment that Kiwis will be at the front of the queue for shares.

“On the other hand, we want to ensure there is enough tension in the share price for investors. A secondary listing in Australia will help to achieve that.

“Another point worth noting is that some Australian institutions, under their own investment mandates, would not be able to invest in Mighty River Power unless it was also listed in Australia.”

Mr Ryall says the website for pre-registration and for the share offer itself has been designed to restrict people from outside New Zealand from participating.

However, the IPO will be open to certain institutional offshore investors because that will help ensure New Zealand taxpayers get the best price for the shares being sold. Ministers expect around 85-90 per cent of shares to be held by New Zealanders after the share offer.

Other decisions confirmed today include:
• The minimum application for shares will be $1000, increasing in $100 increments.
• New Zealanders applying for up to $2000 worth of shares will not be scaled back if the IPO is over-subscribed.
• A loyalty bonus will apply for New Zealand retail investors who keep their shares for a minimum period. The terms of that bonus will be announced before the share offer opens.

Mr Ryall said more details about the pre-registration process will be announced tomorrow.

Mighty River Power share offer – media Qs and As

What are you announcing today?

The Government will offer the public a minority stake in Mighty River Power in the second quarter of this year, subject to market conditions.

To start that process, a pre-registration period for New Zealanders will commence tomorrow.

What is pre-registration?

Pre-registration is an obligation-free opportunity to express interest in buying Mighty River Power shares. New Zealanders who pre-register will be informed when the share offer opens and be provided with an offer document (either hard copy or via email).

Pre-registration is free and does not mean you have to apply for shares.

If I pre-register do I have to apply for Mighty River Power shares?

No. Pre-registration does not oblige you to apply for Mighty River Power shares. You should make your investment decision only after carefully considering the information contained in the offer document, once it becomes available.

Pre-registration simply lets us know you are interested, and helps us to give you access to the offer document when it is available.

Who can pre-register?
Pre-registration is only available to New Zealanders.

In order to qualify as a New Zealand applicant, you must supply, as part of your application for shares in Mighty River Power (when the share offer is open), a:

1. Valid IRD number; and
2. Valid New Zealand bank account; and
3. New Zealand address; and
4. A declaration that you are a New Zealand citizen or permanent resident in New Zealand.

If you don't have an IRD number or bank account you should arrange for these now before the share offer opens.

Institutional investors are not eligible to pre-register.

If you are considering applying for Mighty River Power shares on behalf of your children or grandchildren you will need to make sure they have their own IRD number and bank account.

When can I pre-register?
You can pre-register from Tuesday 5 March to 22 March 2013.

How do I pre-register?
You can do that via the website or a call centre. Details will be released on 5 March.

Who will be able to apply for Mighty River Power shares?
The Mighty River Power share offer will be open to New Zealand Applicants. Institutional investors in New Zealand and certain other jurisdictions will also be able to apply. Once the share offer opens, you will be able to apply online on the website or by using the paper application form in the offer document.

You will not need a broker to be able to apply for shares. However, if you seek advice from a broker in relation to the Mighty River Power share offer, you should not have to pay brokerage.

How much will Mighty River Power shares cost?
The price of Mighty River Power shares has not yet been determined. Details of the share offer, including how the price will be set, will be contained in the offer document, which is expected to be publicly available in April 2013. The minimum application amount will be NZ$1,000.

When will the Mighty River Power share offer open?
The Crown has not yet decided on the final date of the Mighty River Power share offer. When that decision is made, New Zealand investors will be informed of the timing of the share offer and the process by which they can apply for shares. The final decision will be subject to market conditions.

The Mighty River Power offer document will be publicly available within New Zealand following its registration with the Registrar of Financial Service Providers and the share offer is expected to open one week later.

This is expected to be in mid April 2013.

How does the rest of the process work?

The attached graphic outlines the five main steps:

• Pre-registration
• Lodgement of the offer document
• Offer period
• Book-build and allocation
• Listing

What is the Order in Council process, and why are you doing it now?
Before the sale of shares can commence, Mighty River Power needs to cease being a State Owned Enterprise and become a MOM company. This is done by removing it from the SOE Act (and placing it under the Public Finance Act) – which is what the Order in Council will do.

Only Mighty River Power is being removed at this time. The legislation was deliberately drafted so that companies can be separately removed from the SOE Act and floated.

The Order itself will come into force on 8 March 2013 (the day after the date of its notification in the New Zealand Gazette).

What is the yet-to-settle Iwi proposal? Who gets it and why?
This policy was announced on 17 October 2012. It gives Iwi groups yet to complete their Treaty settlements the opportunity to participate in the Government share offer programme.

Iwi yet to settle their claims can choose to receive a percentage of their forecast settlement package “on account” in the form of shares. Subject to meeting the criteria for eligibility, they will be able to buy ordinary shares at the IPO price, on the understanding that the purchase forms part of their overall settlement package.

More details are at: http://www.beehive.govt.nz/release/iwi-participation-government-share-offers

Important notice
The Crown is considering offering shares to the public in Mighty River Power Limited (“Mighty River Power”). No money is currently being sought and no applications for shares will be accepted or money received until after an investment statement containing information about the offer of shares is available (the "Share Offer Document"). It is intended that an application will be made to NZX Limited (“NZX”) to list Mighty River Power on the NZX Main Board. The application will be made closer to the time that shares in Mighty River Power are offered to the public. No such applications have yet been made.

The contents of this press release are not permitted to be made available to persons in any country other than New Zealand. Mighty River Power's shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "United States Securities Act") or the securities laws of any state of the United States and may not be offered or sold in the United States unless the shares are registered under the United States Securities Act, or an exemption from the registration requirements of the United States Securities Act and applicable United States state securities laws is available.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Gordon Campbell: On Bank Scandals (And Air Crashes)

Last month, the Australian Securities and Investment Commission (ASIC) filed proceedings against Westpac over activities that have some distinct echoes of the Libor scandal. More>>

Budget: Health Funding Must Keep Up With Need

NZNO: “The nursing team has been doing more with less for years. It’s getting to the point that we’re really worried about our colleagues, our patients, our jobs and the level of health care available for people in our country." More>>

ALSO:

Emissions Inventory: Time For The Government To Do The Right Thing

It’s time for the National Government to step up and do the right thing to reduce climate pollution as data shows New Zealand’s greenhouse gas emissions are higher than ever, the Green Party said today. More>>

ALSO:

Budget 2016: More Partnership Schools To Open

Seven new schools will join the eight Partnership Schools already open, along with further new schools opening in 2017. “The growth of this policy is a reflection of the high level of interest from educators and community leaders,” Mr Seymour says. More>>

ALSO:

No Correspondence With English: Did Brownlee Make Up Sale Of Navy Ships ‘On The Hoof?’

Having revealed that several Royal New Zealand Navy vessels have not left port in years, New Zealand First is now asking the Minister of Defence to prove he did not come up with the idea of selling HMNZS Taupo and Pukaki until the media asked him. More>>

Housing Plans: Labour- Abolish Auckland Urban Boundary
The Government should rule out any possibility of an urban growth boundary in Auckland Council’s Unitary Plan if it is serious about fixing the housing crisis. More>>
Greens - State House Solution
The Homes Not Cars policy allows Housing New Zealand to retain its dividend and, in addition, would refund its tax, to spend on the emergency building of around 450 new state houses. More>>

ALSO:

Houses And Taxes: Post-Cabinet, Pre-Budget Press Conference

The Prime Minister said that the pre-budget announcements showed that his Government is “investing in a growing economy”. He re-affirmed the National Government’s commitment to lowering personal tax rates but that any such change must fit with the fiscal reality of the time. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news