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Asset sales cost hits $1 billion

24 February 2016

Asset sales cost hits $1 billion

The cost to New Zealanders of National’s asset sales has today hit $1 billion, according to figures released by the partially privatised power companies.

The latest interim dividend figures from the partially-privatised Mighty River Power, Genesis, and Meridian show that the Crown has forgone $945.14 million in dividends since the asset sales. The National Government spent $96 million on the asset sales programme, including bonus-share sweeteners for investors. Combined, that means the asset sales have a total cost of $1.041 billion to date.

“Every year since National’s asset sales, New Zealanders are losing out on millions of dollars that are going to private investors instead,” Green Party energy spokesperson Gareth Hughes said.

“With the cost of asset sales tipping over a billion dollars, it’ll only be a few more years before the total cost is more than the asset sales raised – after that, there will be an ongoing net loss to New Zealand.

“As ordinary Kiwis open their power bills this winter and see the price rising again, they’ll be asking, ‘how has the power company sell-off benefited me?’

“The fact is, National’s asset sales were a giant transfer of wealth from all New Zealanders to a few investors who get to pocket the profits, while the rest of us are forced to pay more and more for our power.

“The lost dividends are a double blow to ordinary Kiwis who are also facing rising power prices.

“Power prices have risen eight percent in real terms since the first asset sales, and shareholder data shows that the power company profits are increasingly going overseas and to big institutional investors.

“National’s attempt to get a quick buck to pay for its tax bribes is a long-term lose-lose for ordinary New Zealanders,” Mr Hughes said.

CompanyMighty River Power (MRP)Meridian Energy (MEL)Genesis (GNE)
Number of shares sold675,031,4041,225,413,626475,924,404
Issue price per share$2.50$1.50$1.55
Settlement date14-May-1330-Oct-1316-Apr-14
Proportion sold48.24%48.98%47.61%
Final dividend 2013 (cents)7.2
Interim dividend 2014 (cents)5.24.19
Final dividend 2014 (cents)8.36.826.6
Special dividend 2014 (cents)52
Interim dividend 2015 (cents)5.64.8 + 1.4 special8
Final dividend 2015 (cents)8.4 + 2.5 special8.08 + 3.95 special8
Interim dividend 2016 (cents)5.75.1 + 2.44 special8.2
Estimated amount of dividends foregone since listing on NZX ($m)*$323.34$475.22$146.58

*Data compiled by the Parliamentary Library from annual reports and interim reports of the companies concerned.


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