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

Gordon Campbell: On First Time Voting (Greens)

For the last two days, I’ve turned my column over to a couple of guest columnists who are first time voters. They’ve been asked to explain why they were voting, for whom and what role they thought their parental upbringing had played in shaping their political beliefs ; and at the end, to choose a piece of music. Today’s guest columnist is Ana Avia-O’Connor, who will be casting her first time vote on Saturday for the Greens.

If I didn’t know any better, it would seem the world has conspired for me to be a Green Party voter. Parents, Green voters? Check. Participation in bilingual education that stressed the importance of inquiry, solidarity and the Treaty? Check. Some sort of vegetarian leanings (seven years and counting, jus’ sayin’)? Check. However, above all of that, I’m voting Green because I believe in supporting the importance of every New Zealander’s contribution to Aotearoa, from the hairdresser in Foxton to the fisherman in Bluff. You could say that I like the cut of the Greens’ jib. More>>

 

Parliament Today:

Big March: Call For An End To Domestic Violence

Hundreds of protesters marched down Lambton Quay to Parliament Monday calling for an end to domestic violence. Wearing white facemasks, waving banners and calling for “safety” for the women and children of New Zealand.. More>>

ALSO:

Meddling: Aussie Liberals Embroiled In Key Campaign

John Key needs to explain why Australia’s Liberal Party is interfering in New Zealand domestic politics and is encouraging Kiwi voters across the ditch to vote for National just days out from the election, Labour’s campaign spokesperson Annette King says. More>>

ALSO:

SURVEILLANCE:

Election Ad Soundtrack: Rapper Eminem Sues National Party Over Copyright Breach

US rapper Eminem is suing the New Zealand National Party for alleged copyright infringement over unauthorised use of the rapper’s ‘Lose Yourself’ song in an election campaign advertisement. More>>

ALSO:

Pre-Election Chartering: Four New Partnership Schools To Open

Education Minister Hekia Parata today announced the Government has signed contracts to open four new Partnership Schools in 2015. More>>

ALSO:

Werewolf 50 Out Now - The Election Issue: Loss Leaders

Gordon Campbell: A third term requires a mature decision, with eyes wide open. It calls for a conscious vote of confidence… Without trying hard here are about 19 reasons, in no particular order, for not ticking ‘party vote’ National. More>>

ALSO:

Not-Especially New Plans: All Prisons To Become Working Prisons Under National

All public prisons in New Zealand will become full working prisons by 2017, and ex-prisoners will receive post-release drug addiction treatment if National is returned to government, says Corrections Spokesperson Anne Tolley. More>>

ALSO:

Māngere: "False Claim Of Matai Title" - Labour

National must explain why its candidate for Māngere Misa Fia Turner appears to be using a Matai title she is not entitled to, Labour’s MP for Māngere and Pacific Islands Affairs spokesperson Su’a William Sio says. A Matai title is a legally-recognised ... More>>

ALSO:

CPAG Report: No New Zealand Child Should Grow Up In Poverty

Child Poverty Action Group's flagship policy publication Our Children, Our Choice: Priorities for Policy calls for cross party political agreement to underpin an action plan to eliminate child poverty in New Zealand. More>>

ALSO:

Gordon Campbell:
On National’s Phantom Tax Cut Package

Hmmm. So National’s tax cuts package turns out to be one of those television advertisements that screams a headline promise – perfect skin! a youth tonic that works! – while in very small print there’s an out clause: special conditions may apply. More>>

ALSO:

Water: New Marine Reserves On West Coast Opened

Five new marine reserves were officially opened by Conservation Minister Dr Nick Smith on the West Coast of the South Island to protect a range of marine ecosystems for conservation, science and recreation. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news