Meridian float gets go-ahead

HAMISH RUTHERFORD
Last updated 16:36 16/09/2013

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The Government has pushed go on the sale of Meridian, saying it expects the company to be listed on the stock exchange on October 29.

Finance Minister Bill English said the details of the sale would be contained in an offer document which would be lodged on Friday.

As signalled, investors would be able to pay for shares in two instalments, 18 months apart, in what has been dubbed a "buy now, pay later" scheme.

Marketing of the company would start this evening.

English said New Zealanders would be at the front of the queue for the sale. They would have about three weeks from September 30 to consider whether to invest.

"The Government was very clear about the opportunity for New Zealanders when we put our share offers programme to New Zealanders during the 2011 election campaign. The compelling reasons for proceeding with the share offers are as valid today," English said in a statement.

"The Government share offer will enable New Zealanders to invest in big Kiwi companies at a time when they are telling us they want to diversify their growing savings away from property, bank deposits and finance companies.

"And we can invest the proceeds in other public assets like modern schools and hospitals, without having to borrow that money in volatile overseas markets, and increase debt."

The instalment receipts were being used instead of the loyalty shares offered to investors in Mighty River Power.

Meanwhile the Government has confirmed that retail investors would be given a "price cap" so they would know exactly how much they would be paying for shares.

The offer document will set out "all the information investors need to make an informed decision about whether to invest" including price range, the price of the instalments and the expected yield - the value of the dividend in relation to the initial price.

Once the offer document was lodged, the Financial Markets Authority had around five business days to review it, English said.

"This 'consideration period' is expected to conclude on 27 September."

The general offer for shares closes on October 18, followed by a bookbuild where institutions bid for shares.

Like Mighty River, Wellington-based Meridian would list on both the NZX and the Sydney-based ASX.

State-owned Enterprises Minister Tony Ryall said the Government was committed to ensuring at least 85 per cent of Meridian remained in the hands of Kiwis.

It had appointed a retail syndicate which would market the offer to New Zealanders. Brokers would also be able to assess demand from retail clients and submit bids, with the Government choosing how much to allocate.

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Meridian is New Zealand's largest generator of electricity, producing more than a third of New Zealand's power, mainly from South Island hydro stations. It also has several wind farms, including the giant West Wind near Wellington.

The Air New Zealand sale was likely to be carried differently, with the government noting that any New Zealander could already invest in the company as it already had shares listed on the NZX and ASX.

Speaking to reporters, Prime Minister John Key said because Air New Zealand was already a listed company it would be a much more truncated process.

That selldown would definitely happen before next year's election.

Sources have said it could easily happen this year.

Ryall confirmed the Government was pushing ahead with the possible partial sales of Genesis and Air New Zealand.

Up to 49 per cent of Genesis is expected to be sold in the first half of 2014, while the Government's stake in Air New Zealand will be reduced to no less than 51 per cent.

- © Fairfax NZ News

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