Clayton Cosgrove
SOE Spokesperson

5 April 2013

Massive uncertainty hangs over MRP sale

The Government is flouting the golden rule of public offerings with Mighty River – clear up the uncertainty before listing, says Labour’s SOEs spokesperson Clayton Cosgrove.

“With Rio Tinto threatening to walk away from Tiwai Point the electricity market potentially faces major turmoil. The Government has admitted that risk in today’s offer documents, but somehow National still thinks it is a good time to list an electricity company.

“Almost 15 per cent of the electricity market is in flux and power stations may be closed. To list Mighty River now is financial mismanagement on an epic scale.

“The May deadline for the sale plays right into the hands of Rio Tinto. National must cancel the sale so the time pressure is removed and a cool-headed approach to negotiations can be taken. Otherwise investors will expect a discount, and taxpayers will lose out.

“John Key knows it is a bad time to sell these assets. That’s why he is bribing his much-vaunted ‘Mum and Dad investors’ with a loyalty scheme – a scheme that conveniently expires a few months after next year’s election.

“The loyalty scheme unveiled today will cost taxpayers tens of millions of dollars, maybe as much as $50-million. If the Government’s got to spend that much money to convince Kiwis to keep these shares then it must be worried.

“I urge New Zealanders thinking of investing in Mighty River to take a long hard look at this offer document,” says Clayton Cosgrove.

ENDS

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