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


Mighty River Power IPO to go ahead early next year

Rt Hon John Key
Prime Minister
3 September 2012 Media Statement

Mighty River Power IPO to go ahead early next year
The Government will proceed with an initial public offering of up to 49 per cent of Mighty River Power in the period of March to June 2013, Prime Minister John Key says.

That would be followed in the latter part of the year by an IPO of up to 49 per cent in either Meridian or Genesis.

“The Government’s preference would have been for a share offer for Mighty River Power this year.

“However, after careful consideration ministers have decided to undertake a short period of consultation with iwi on the ‘shares plus’ concept raised in the Waitangi Tribunal’s interim report.

“Since receiving that report 10 days ago, much of the legal and official advice we have received has been around this concept,” Mr Key says.

In essence, ‘shares plus’ refers to the idea that certain Maori interests would be given particular rights and powers in relation to the company, above and beyond the rights of other shareholders.

Mr Key says that after careful consideration and discussion, the Government’s current view is that this idea should not be progressed. There are five main reasons for this view:

• It is not in the national interest for any group within Mighty River Power’s potential 49 per cent minority shareholding to be given such rights.

• Almost every form of redress to Maori that could be covered by ‘shares plus’ can 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. To take one example, if some Maori shareholders had the ability to make decisions on strategic issues, under well-established law, those shareholders must act in the interests of the whole company and not simply as a representative of Maori.

• 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.

However, ministers have today decided that taking some time to talk about ‘shares plus’ with relevant iwi is the prudent thing to do. That means preparation for the Mighty River Power share offer will continue to proceed, but in the March to June window next year, rather than in 2012.

“The timeframe for the IPO does not alter our commitment to providing investment opportunities to New Zealanders through our share offer programme,” Mr Key says.

“It’s good for savers, because it opens up new opportunities to invest in large, local companies. It’s good for taxpayers because we expect to generate between $5 billion and $7 billion in proceeds, which will be invested in new public assets like modern school and hospitals. That’s money we don’t have to borrow from overseas lenders.”

Ministers accept that even after taking the extra period for consultation there remains a litigation risk, Mr Key says.

“Just last Friday the Attorney General received a letter from the Māori Council which made clear their intentions in that regard.

“The Māori Council has told Ministers that if the Government does not follow the Tribunal’s recommendations – which include a national hui on water rights – it will take the Government to the High Court to attempt to halt the partial sale of Mighty River Power.

“However, Ministers have considered and rejected the idea of a national hui, as we don’t believe it is the appropriate way forward.”

The Government’s position on water rights has been consistent and clear.

• In common law no-one owns water.

• Maori do have rights and interests in water that are being addressed, and will continue to be addressed, through the Treaty process when dealing with historical claims and by other mechanisms, iwi by iwi.

• The partial sale of Mighty River Power does not impact on the Crown’s ability to recognise Maori rights and interests in water.

“The preferred focus is to develop models for the control and management of water that reflect relevant Maori interests. We already have those processes in train, through dialogue with iwi leaders and through the Government’s Fresh Start for Fresh Water process,” Mr Key says.

“Accordingly, we will be outlining our position to the Māori Council.

Mr Key says the issue is not about the Government against Māori, or Māori against Government.

“Within Maoridom there are a number of views on this issue – there is no one voice.”

Ministers consider that the Crown would be in a very strong position should legal action go ahead. If it was to occur, the Government expected it to happen sooner rather than later.

In the meantime, work on the various elements of the share offer was well underway, Mr Key says. That work would continue.


Pre-Prospectus Disclaimer
The Crown is considering offering shares to the public in one or more of Genesis Power Limited, Meridian Energy Limited, Mighty River Power Limited, Solid Energy New Zealand Limited and Air New Zealand Limited. 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 relevant offer of shares is available.

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Populism’s Changing Of The Guard, Plus A Soul Music Playlist

The weekend’s Newshub/Reid Research poll results - Act up to 11.1%, National up 1% but still sitting at only 28.7%, Labour down to 43%, the Greens up to 8.5% - shows that the combined centre right vote is still languishing nearly 12 points behind the combined centre-left vote, 45 months after the last centre-right government was voted out... More>>


Finance: Finance Minister And RBNZ Governor Agree To Update MOU On Macro-prudential Policy

Finance Minister Grant Robertson and Reserve Bank Governor Adrian Orr have updated the Memorandum of Understanding (MoU) on macro-prudential policy to further protect the financial system and support the Government’s housing objectives... More>>

Government: Offers Formal Apology For Dawn Raids
Prime Minister Jacinda Ardern has today formally apologised to Pacific communities impacted by the Dawn Raids in the 1970s.

Between 1974 and 1976, a series of rigorous immigration policies were carried out that resulted in targeted raids on the homes of Pacific families... More>>

Government: Bill Introduced To Protect Against Conversion Practices

Legislation has been introduced to Parliament to protect against practices intended to change or suppress someone’s sexual orientation, gender identity, or gender expression... More>>


Human Rights Commission: Successive Governments Responsible For Massive Breaches Of The Right To A Decent Home

Te Kahu Tika Tangata / Human Rights Commission has today launched Framework Guidelines on the Right to a Decent Home in Aotearoa and announced that it will hold a national inquiry into housing... More>>

NZUS Council: Welcomes Nomination Of Senator Tom Udall As US Ambassador To NZ

The NZUS Council welcomes the nomination of Senator Tom Udall to the role of US Ambassador to New Zealand and Samoa, NZUS Council executive director Jordan Small said... More>>

BusinessNZ: Visa Extensions Welcomed
BusinessNZ has welcomed the extension of some critical skill visa durations and changes to immigration systems to speed processing. Chief Executive Kirk Hope says move acknowledges advocacy by the hospitality sector, the BusinessNZ Network and others, and comes not a moment too soon.... More>>




InfoPages News Channels