5 April 2013

Nats’ offer document misleads on Mighty River risks

The Mighty River Power offer document release by the National Government today fails to adequately spell out the risks for Kiwi mums and dads of investing in Mighty River, Green Party Co-leader Dr Russel Norman said today.

The offer document lists risks including the Tiwai Point smelter closing, regulatory changes, and Treaty claims but makes no attempt to quantify these risks or assess their likelihood.

“National has been pushing Kiwis to invest their savings in Mighty River, so it has a duty to properly inform them of the risks,” said Dr Norman.

“There is a very real danger that the closure of Tiwai Point, Treaty claims, and reforms by a future government will reduce the value of these shares significantly but National has failed to give potential investors an estimate of the size of those risks.

“A bland summary of risks that leaves it up to the investor to gauge their size might be adequate for professional investors but it is not good enough when National is trying to lure thousands of ordinary Kiwi families into the sharemarket for the first time.

“Bill English has been telling Parliament that these assets are risky for the Government to own but he seems to have no qualms about asking Kiwi families to invest in them blindly.

“This is a another bungle in an asset sales process that National has mishandled from start to finish,” said Dr Norman.

National also announced a 1 for 25 bonus share giveaway for retail investors who hold on to their shares for two years. If all shares were bought by retail investors, the maximum cost of that giveaway is $77 million at the top issue price of $2.80. In the sale of QR National by the Queensland Government, the bonus share giveaway cost $30 million.

“The National Government is promising to giveaway up to $77 million worth of shares to the few people who can afford to buy and hold them. That’s a straight transfer of wealth from the vast majority of Kiwis who can’t afford to or don’t want to buy shares in Mighty River to the small percentage of people who will,” said Dr Norman.

“It’s another instance of National splashing taxpayer cash around to try to increase the popularity of a policy that Kiwis don’t want and that our country doesn’t need,” said Dr Norman.

ENDS

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