The Government has confirmed Mighty River Power will be the first state-owned asset to be partially sold and says an initial public offering (IPO) is likely next year but is subject to market conditions.
Cabinet yesterday agreed to take initial steps towards the Government's goal of selling up to 49 per cent of four state-owned energy companies and further reducing its shareholding of Air New Zealand.
The other energy companies to be sold are Genesis, Meridian and Solid Energy.
Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall have just announced Treasury will proceed with what the Government calls its mixed ownership programme.
More decisions about the timing of sales will be made early next year but the ministers said there was likely to be a number of IPOs over the next three years.
The timing would be influenced by company circumstances as well as market conditions.
Cabinet also agreed Maori would be consulted about the asset sales in a series of meetings early next year but that consultation would not cover investment opportunities for iwi.
Legislation would be required to remove the four energy companies from the State Owned Enterprises Act, the ministers said.
Mighty River Power is considered to be in the best position to take to market and the IPO is expected to be in the third quarter of 2012.
Officials will appoint advisers and lead managers before Christmas to begin the due diligence process.
The assets being sold are less than 3 per cent of the assets owned by taxpayers.
With about $100 billion in term deposits and billions more in KiwiSaver and other investment funds, New Zealanders were well placed to invest in the asset, the ministers said.
The Government has promised it would retain at least 51 per cent control of the companies and New Zealanders would be at the front of the queue.
It has also promised New Zealand ownership would be around 85 to 90 per cent and no shareholder other than the Government would be able to own more than about 10 per cent.
The Government expects to raise between $5 and $7 billion through the sales.
- The Dominion Post
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