Heavy traffic hits Mighty River Power share site
HAMISH RUTHERFORD, KATE CHAPMAN AND TRACY WATKINS
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The website for pre-registering for Mighty River Power shares appears to be buckling under pressure, despite assurances from the Government it could handle the interest.
Earlier, the site www.mightyrivershares.govt.nz was intermittently showing an unavailable message.
Yesterday State Owned Enterprises Minister Tony Ryall appeared confident the website could handle the likely demand.
"I've been assured by our advisers, and let me assure you I've gone through this... they're pretty confident that the website will be able to deal with a wide range of traffic."
Today the Government acknowledged the website had seen "huge traffic" in the last few hours, which it put down to the announcement that there was a bonus incentive for those who pre-registered.
"It's worth noting that while there is an incentive to pre-register, there's no extra advantage in doing so today," a spokeswoman for Finance Minister Bill English said.
"People have until 22 March to pre-register."
This morning, English and Ryall officially launched the pre-registration period for the Mighty River Power shares in Auckland.
The ministers announced that those who pre-registered would be eligible for up to 25 per cent more Mighty River Power shares than those who did not. In addition, New Zealanders who pre-register for Mighty River Power shares will be better off if demand exceeds supply and allocations are cut back.
"We've already announced that New Zealanders applying for up to $2000 of shares will be guaranteed that amount," English said.
"However, if demand exceeds the number of shares available, then New Zealanders who request more than $2000 worth will have their bid scaled back."
Those who pre-registered would not have their allocations cut back as much as those who did not, said English.
To pre-register for shares, New Zealanders located in New Zealand can go to the website www.mightyrivershares.govt.nz or call 0800 90 30 90.
A $1 million advertising campaign is kicking off the Government's bid to spark a rush for shares in the first sale of state assets in more than a decade.
Investment experts expect hundreds of thousands of people to get in the queue when the Government starts building a list of potential buyers in Mighty River Power shares - attracted by no brokerage fees and a loyalty bonus limited to New Zealand citizens and permanent residents.
Prime Minister John Key yesterday reiterated the Government's promise that Kiwis would be first in the queue for shares and said he would hold to his election-year promise to aim to keep ownership of at least 85 per cent of Mighty River Power in New Zealand hands. Of that, 51 per cent will be the stake that remains in Government ownership.
The website launched today would be accessible only from within New Zealand as a sign of the Government's sensitivity. "The Government's intentions are crystal clear; that is ... New Zealanders at every turn are favoured," Key said.
But opponents are accusing the Government of ignoring widespread opposition to asset sales. They have collected nearly 400,000 signatures in a bid to force a referendum.
Labour leader David Shearer said most Kiwis would miss out, and listing the shares on the Australian stock exchange, as well as New Zealand, would give Australian institutional and private investors access.
Investment analysts say the Government will have no problem finding cashed-up Kiwi buyers - with baby boomers and young professionals tipped to lead the charge when a website and 0800 number start taking no obligation expressions of interest today.
But the Government is leaving nothing to chance - it has a $1 m newspaper, television, radio and online advertising campaign in the wings to generate as much interest as possible.
It is aiming to sell the shares before May 16, when it delivers the next Budget.
Business commentator Brian Gaynor expected interested in Mighty River Power to be even stronger than Contact Energy, which attracted 225,000 investors when it was floated in 1999.
There was about $112 billion in bank deposits sloshing around at the moment, enough for the float to raise $1.5-$2b. Much of that would come from investors aged over 55 whose children had left home, Gaynor said.
"There's a lot of money sitting around in New Zealand today which is getting a very low return, and a lot of those people will say ‘I'll put a little bit into Mighty River Power'."
But business commentator Rod Oram said many households would struggle to find the money.
Mighty River Power is the first of three state-owned energy companies expected to be partly sold to raise between $5b and $7b.
WHAT HAPPENS NEXT?
New Zealanders who think they might want shares can pre-register their interest on a website or by calling an 0800 number from today. The website is accessible only within New Zealand. Offer documents will be sent out to everyone who pre-registers but they are under no obligation to buy. Pre-registration closes March 22 and the shares will go on sale in mid-April.
WHO IS ELIGIBLE?
People with an IRD number, a valid New Zealand bank account, and a New Zealand address. They must also make a declaration that they are a New Zealand citizen or permanent resident. You don't need a broker to apply for shares and if you seek advice you should not have to pay brokerage fees. Institutional investors both in New Zealand and overseas are also eligible but the Government says it is aiming for up to 90 per cent New Zealand ownership.
HOW MUCH WILL THE SHARES COST?
That won't be known until mid-April but the minimum application amount will be $1000 and any New Zealander applying for up to $2000 worth of shares is guaranteed that amount. New Zealand retail investors who keep their shares for a minimum period will be eligible for a loyalty bonus. Institutional and overseas investors won't get the loyalty bonus.
- © Fairfax NZ News
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