Possible sale of three SOE power companies

HAMISH RUTHERFORD
Last updated 05:00 20/12/2012

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Fresh from its court victory on asset sales, the Government is considering selling all three state-owned electricity companies next year.

Finance Minister Bill English linked the possibility of three sales to buoyant financial markets and the plan would also mean the most controversial sales were over before election year.

Earlier this month the High Court dismissed a bid by the Maori Council to delay the float of Mighty River Power, now scheduled for the first half of 2013.

The council is appealing to the Supreme Court, but the matter could be resolved in February.

Mr English said this could clear the way for at least two floats in 2013 as previously signalled, while a third was now being considered.

"We'd certainly do two [sales in 2013], the question is whether we do three. Some people have suggested it," Mr English said.

"I don't want to get ahead of ourselves, [but] the market's suggesting it might be possible. That will all get tested if we get through the Supreme Court case."

Despite falling from recent highs, New Zealand's benchmark share index, the NZX-50, is up 21 per cent this year.

"Market condition are great for floating a company at the moment," Craigs Investment Partners' head of research, Mark Lister, said.

"Sentiment for shares is high, interest rates are going to be low for a year if not more. The environment is great."

The Government has signalled it wants to raise $5 billion to $7b by selling up to 49 per cent of Mighty River, Meridian and Genesis. A sale of partial sale of Solid Energy is rumoured to be on hold.

Mr English also appeared to signal the shares would be listed only on the NZX in Wellington. Investment bankers have been pushing for an Australian listing to create price competition.

A spokesman later said that this and other decisions would be confirmed and announced closer to the respective offers.

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- BusinessDay.co.nz

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