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

 


New structure for Genesis Energy share offer

Hon Bill English

Minister of Finance

Hon Tony Ryall

Minister for State Owned Enterprises

26 February 2014

Media Statement

New structure for Genesis Energy share offer

The Government has today confirmed that the Genesis Energy share offer will proceed next month with a different structure from previous Government share offers.

The Genesis offer is expected to open in the second half of March with the company expected to be listed on the sharemarket around mid-April, subject to market conditions, Finance Minister Bill English says.

“We will set out all the details in the next few weeks. As with the other share offers, New Zealanders will be at the front of the queue for Genesis shares and we remain committed to at least 85 per cent Kiwi ownership.”

Each of the previous share offers was structured to meet the Government’s balanced objectives of achieving good value for taxpayers and providing opportunities for New Zealand investors.

“We’ve so far raised around $4 billion through the share offers, which is being invested in new public assets such as schools, hospitals and ultra-fast broadband,” Mr English says. “That’s $4 billion we don’t have to borrow from overseas lenders.”

The Government will introduce new features to the Genesis offer to achieve its objectives, and to make it as easy as possible for New Zealand retail investors to participate. They include:

• The shares will be priced at the start of the offer period, rather than at the end as occurred with the previous share offers. This process, known as a front-end book build, was used successfully last year during the Synlait, SLI Systems and Wynyard IPOs.

“This will provide more certainty for Kiwi retail investors, because they will know the price when they apply for shares,” Mr English says.

“For the first time in the share offer programme, New Zealand sharebrokers will bid for shares at the same time as institutions. This will create stronger competition for shares during the book build.”

State Owned Enterprises Minister Tony Ryall says this process allows all major sharebroking firms to take part in the book build alongside New Zealand and international institutions, creating stronger competition among professional investors.

“We expect that a range of advice and independent reports from sharebrokers and other analysts will be available to New Zealand retail investors – as was the case during the Meridian IPO.”

• The Government expects to sell between 30 per cent and 49 per cent of the shares in Genesis.

“When we announced the share offer programme almost three years ago, we said that we would sell up to 49 per cent of these companies, subject to market conditions,” Mr Ryall says.

“Our initial advice is that a smaller Genesis offer could increase price tension in the front-end book build by offering fewer shares to more bidders.

“But we will not know that until we further test demand in the market, where investors now have a wider choice of several energy companies.

“Our aim is to set a fair market price that works for both taxpayers and investors. We will announce a final decision on how much of the company we intend to sell before the offer opens.”

• The Government will offer a loyalty bonus scheme to eligible New Zealand retail investors in Genesis, as occurred with Mighty River Power. And there will be a separate Investment Statement and Prospectus.

“The number of bonus shares and the loyalty term will be announced when the Investment Statement and Prospectus become available,” Mr Ryall says.

“In addition to the front-end book build and loyalty bonus scheme, we are taking another step to make the process more user-friendly.

“Genesis Energy directors and the Treasury have been consulting closely with the Financial Markets Authority to produce a separate and more succinct Investment Statement for the Genesis offer.

“The more succinct Investment Statement will be the primary investment document for retail investors.”


• The Government will not be offering Genesis shares to United States institutions.

“This decision removes restrictions on the way that the Crown, the company and its advisers are able to provide information to New Zealand retail investors, and will help improve the accessibility of this offer,” Mr Ryall says.

An Order in Council to remove Genesis Energy from the State Owned Enterprises Act and insert it into Schedule 5 of the Public Finance Act is expected to be considered by Cabinet on 3 March 2014.

“This is a necessary step to enable the Crown to proceed with the Share Offer,” Mr Ryall says.

Mr English and Mr Ryall reiterated the Prime Minister’s announcement this week that the Genesis share offer will be the last state owned enterprise or mixed ownership company to be floated by the National-led Government.

“The Government won’t be selling any more shares in SOEs or mixed ownership companies – either this term or after the election,” they say. “We’ve achieved what we wanted to with the share offers in energy companies and Air New Zealand.

“We’re now moving to a business-as-usual approach to SOEs. That obviously doesn’t preclude SOEs buying and selling assets themselves, which they do all the time – or entering into joint ventures or other arrangements.

“The remaining SOEs are a combination of small entities, natural monopolies or companies in sectors that are unsuitable for future share offers.

“What people don’t realise is that the value of the share sales programme is just 2 per cent of around $250 billion of total assets owned by taxpayers.

“Our focus will remain on improving the management of this significant stock of assets on behalf of New Zealand taxpayers who rely on them to deliver high quality public services,” the ministers say.

Important notice

The Crown is considering offering shares to the public in Genesis Energy Limited ("Genesis Energy"). 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 Share Offer is available. The Crown does not guarantee the shares in Genesis Energy.  It is intended that an application will be made to NZX Limited to list Genesis Energy on the NZX Main Board.  The application will be made closer to the time that shares in Genesis Energy are offered to the public. No such application has yet been made.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

More Evidence - Scoop Press Conference Recordings:
PM's Post-Cab Presser 8/8/11
"at that point [Tucker] told me he'd release it ..."

Hager Revelations: Inquiry Into NZSIS Release Of Goff Docs

The Inspector-General of Intelligence and Security (IGIS), Cheryl Gwyn, announced she would be instituting an inquiry concerning allegations that the New Zealand Security Intelligence Service (NZSIS) might have released official information to Mr Cameron Slater, regarding briefings provided to the then Leader of the Opposition, for political purposes...

“I am satisfied there is a sufficient public interest justifying the commencement of an own-motion inquiry into the substance of the issues raised with my Office,” said Ms Gwyn. More>>

Goff: Director’s Letter Contradicts Key’s Claims

At yesterday’s media standup, when asked on the topic John Key said ‘I wasn’t told’...
“In a letter dated November 2011 former SIS director Warren Tucker states three times that ‘in accordance with the usual practice of keeping the minister informed’ the Prime Minister had been told. More>>


 

Parliament Today:

Schools, PPTA Sign Up: Primary Teachers And Principals Vote Down Govt Plan

Teachers and principals have voted overwhelmingly against the Government’s controversial “Investing in Educational Success” policy, including proposed highly-paid principal and teacher roles. More>>

ALSO:

Gordon Campbell: On The Usual Round Of Mud Slinging And Name-Calling

This week gave an interesting example of how hard it is to untangle the reality from the slanging matches. The issue that emerged early this week could hardly be more important. Does the government intend to cut spending in health, education and on the environment if re-elected, or not? More>>

Earlier:

Electionresults.co.nz: National and NZ First Rise in Roy Morgan Poll

National has bounced back in the latest Roy Morgan Poll but the big winner has been New Zealand First who rise to their highest level of support since September 2013. More>>

ALSO:

Fish Pun Warning: By Hoki! It’s Labour’s Fisheries Policy

A Labour Government will protect the iconic Kiwi tradition of fishing by improving access to the coast, protecting the rights of recreational fishers and reviewing snapper restrictions, Labour’s Fisheries spokesperson Damien O’Connor says. More>>

ALSO:

It's Official: Governor General Gives Direction To Conduct Election

The Governor General has signed the writ directing the Electoral Commission to conduct the General Election on 20 September 2014. This is the formal authority to run the 2014 election, and enables candidate nominations to open tomorrow Thursday 21 August 2014. More>>

Gordon Campbell: No More Mr Nice Guy

When future historians seek to identify the exact moment when the prime ministerial career of John Key hit the downward slope, they may well point to Key’s interview yesterday with Guyon Espiner on RNZ’s Morning Report. More>>

ALSO:

Dirty (Politics) Weekend: Collins’ Admission Reason For Key To Act

"Despite claiming that the evidence about her in Nicky Hager's book was ‘false’ Judith Collins has now been forced to admit that she did send information about a Ministerial Services staff member to Cameron Slater for him to use in a baseless smear campaign. More>>

ALSO:

Potential Disasters: Underground Coal Fire On Denniston Plateau

Forest & Bird says one or more coal fires have broken out beneath the Denniston Plateau, and that the Department of Conservation (DOC) must stop Bathurst Resources’ preparatory mining work going on there until the fire or fires are extinguished. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news