Meridian listed, more sales to come
The Government is considering further asset sales than those already announced, though it says there is likely to be little left worth selling.
Meridian Energy made its debut on the NZX yesterday at $1.08, 8c above the initial price of $1 paid by investors who snapped up shares in the country's largest electricity company.
With Air New Zealand and Genesis floats already announced, the Government was still considering further asset sales "but the reality is we've got very limited assets", Prime Minister John Key said yesterday.
"Transpower will never be part of the programme, I don't think it actually fits within it, and there are very few other assets that are actually left but we'll need to work our way through that."
Other state assets include KiwiRail, Landcorp, New Zealand Post and Kiwibank.
Mr Key said that despite a need for the bank to raise some capital, selling part of Kiwibank was "unlikely".
"It's more likely that we'd use the proceeds from some of the sales that we're achieving at the moment to invest in Kiwibank. We gave some reasonably strong commitments around Kiwibank and I see us honouring those in the short term."
Finance Minister Bill English was forced to defend the timing of the Meridian sale yesterday after Green Party co-leader Russel Norman revealed Treasury officials warned the Government in 2011 not to sell its assets in quick succession.
National had sold two electricity companies within six months for $3.6 billion, $1.3b less than expected, and indicated that it could force through two more sales within a year of the Mighty River float, Dr Norman said.
"By flooding the market with electricity companies, against the advice of Treasury, National has reduced the revenue the Crown received from the sales.
"The lacklustre prices and the pathetically low levels of participation by ordinary Kiwis in the floats shows that National has completely mismanaged the asset sales process."
The Government has admitted it might not reach its $5 billion-$7b sales target.
Treasury was "always a bit cautious about these things", but the Government believed the sharemarket could handle the large floats, Mr English said.
"The New Zealand stock exchange has had a bumper year this year. It's had record highs, it's had very strong support and it's produced $5 billion or $6 billion of capital raising, of which the Crown is about half."
The Government's share-offer programme added more depth to New Zealand's capital markets, freed up capital for the Government to invest in infrastructure without having to borrow from overseas, and allowed New Zealanders to diversify their savings.
The Government yesterday sold 49 per cent of the shares of Meridian at $1.50 a share.
Investors paid an initial instalment of $1, the price the shares were floated at, with a further payment of 50 cents due in 18 months.
The share price leapt 8 per cent to $1.08 on turnover of just over $150 million in its first few hours.
Mighty River Power shares were yesterday trading at $2.20, well down on the initial float price of $2.50.