Crown liabilities removed from Mighty River
The Government today stripped two clawback indemnities from Mighty River Power ahead of its partial float on the New Zealand share market in May.
The indemnities, which have been in place since 1999 but never used, held the Crown liable for any additional duties, taxes or charges on water or geothermal energy, and any shortfall on any Treaty of Waitangi land settlements.
In a statement released today, the Government said the move was a prudent one ahead of the partial sell-down, and mirrored a simpler process when Contact Energy was privatised 13 years ago.
"We are taking this move to ensure a level playing field for the electricity companies after the Mighty River Power partial float," minister for state owned enterprises Tony Ryall said.
"Leaving the indemnities in place could risk transferring taxpayer capital to private investors with no benefit to the Crown."
MRP chairwoman Joan Withers said the company was getting towards the "end of the tidying up" phase ahead of the release of the investment statement and prospectus, which should be distributed to would-be shareholders shortly.
More than 440,000 investors pre-registered for shares, with the government guaranteeing that mum-and-dad investors a $2000 stake, and a possible bonus further down the track for holding on to the shares for an as-yet-unspecified period.
The Government said it would probably remove similar indemnities that apply to Meridian Energy and Genesis Energy ahead of their partial floats, which have been pencilled in before the end of the year.
The indemnities were established in the 1988 under the ECNZ Crown Sale Deed which was transferred to Mighty River Power when ECNZ was split in 1999.
The Dominion Post