MightyRiverPower IPO delayed until 2013, Meridian or Genesis to follow
Sept. 3 (BusinessDesk) - The government has delayed the partial sale of MightyRiverPower until between March and June next year, giving it time for more talks with iwi on a proposal that would give Maori greater rights than other shareholders.
Prime Minister John Key said the government doesn’t accept the "shares plus concept" raised in the Waitangi Tribunal’s interim report that would give Maori interests rights and powers in relation to MRP "above and beyond the rights of other shareholders."
“However, after careful consideration ministers have decided to undertake a short period of consultation with iwi on the ‘shares plus’ concept,” Key said in a statement after today’s Cabinet meeting. The government’s preference had been for a sale this year.
“Since receiving that report 10 days ago, much of the legal and official advice we have received has been around this concept,” he said.
The part-sale of MightyRiverPower would be followed “in the latter part of the year by an IPO of up to 49 per cent in either Meridian or Genesis,” Key said.
Key gave five reasons why the ‘shares plus’ concept had been rejected.
* It wasn’t in the national interest for any group within MightyRiverPower’s potential 49 percent shareholding to be given such rights;
* Almost every form of redress to Maori that could be covered by ‘shares plus’ could be achieved in other ways;
* The remaining elements of ‘shares plus’ in relation to decision rights over management or strategic decisions would not be able to work in practice.
* If the ‘shares plus’ concept existed it was likely to make the company less attractive to investors, which could be reflected in a lower sale price and therefore be to the detriment of taxpayers.
* Following consultation with iwi earlier this year, a careful and deliberate decision was made to ensure that the Crown’s obligations under the Treaty continue to rest with the Crown, not with the companies.
“The timeframe for the IPO does not alter our commitment to providing investment opportunities to New Zealanders through our share offer programme,” Key said.
The government hopes to raise between $5 billion and $7 billion from the sale of state companies, saying it will spend the money building schools and hospitals. Key said Maori may yet challenge the sales through the courts.
“Even after taking the extra period for consultation there remains a litigation risk,” he said. “Just last Friday the Attorney General received a letter from the Māori Council which made clear their intentions in that regard.”
The Maori Council has warned that it expects the government to follow the Tribunal’s recommendations, including a national hui on water rights, or it will take High Court action to block the MRP sale, Key said.