Govt eyes three SOE floats this year
The Government is eyeing up as many as three power company share floats this year to rake in billions of dollars in extra cash.
The Supreme Court yesterday gave the Government the green light to proceed with its plan to raise money from selling a 49 per cent stake in the State-owned power companies, starting with Mighty River Power.
The first shares will hit the market within months and senior investment banker Rob Cameron is picking "overwhelming" interest.
Finance Minister Bill English said today Mighty River Power had had plenty of time to ready itself for the first float and the sale could occur "within a matter of months" after Cabinet signed off the plan on Monday.
"Generally there's just a couple of opportunities in the year because of the rules around accounting numbers and having up to date information for the public so you can get generally one float in before May or June and another one later in the year, perhaps two, depending on market conditions. As soon as the process for Mighty River power is signed off we'll then move to the other SOEs [State-owned enterprises]."
English said the Government needed the money now because it had "significant calls" on its funds [for] the Christchurch rebuild, including for "new hospitals, new schools, new prisons".
The Supreme Court yesterday dismissed an appeal by the Maori Council, which wanted the Government to delay the first share float while Maori water rights issues were sorted out.
The court said the float was not such an impediment to the Crown as to constitute a breach of the Treaty of Waitangi.
It now looks likely that a referendum on whether the share sales should proceed won't occur intil after one or all of the power companies have been partially privatised.
Labour leader David Shearer yesterday called on the Government to halt the sales and said a referendum would deliver a clear message that the public were deeply opposed.
Labour is deeply critical of the government selling shares in the present economic conditions and against the backdrop of Solid Energy's financial woes.
The Government has had to pull Solid Energy from the share float programme because it is effectively broke, affecting the initial estimates of a $5-$7 billion return on all SOE share floats.
But English told Radio New Zealand the Government had a strong mandate to proceed.
"We had a referendum on it called an election; the Government laid out the policy at the beginning of 2011, it was discussed and campaigned on right through election year; we made it clear what we would do if re-elected. There's no doubt about the Government's mandate to proceed on this.
"The referendum ...has come from the Greens paying its staff to go round the country collecting signatures, including from children."