Companies on block before referendum

Last updated 05:00 26/06/2012

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Three power firms may be either sold down or floated before a referendum on the issue is held, Prime Minister John Key says.

Legislation allowing the sell-down of four energy firms and Air New Zealand to 51 per cent government ownership is expected to pass its third and final reading by a single vote in Parliament today.

Another protest march to the Beehive is planned for today as Opposition parties, unions and Grey Power rally for signatures to a petition to force a citizens' initiated referendum on the partial sales.

To trigger a nationwide vote, 10 per cent of the population would have to sign the petition.

After campaigners had enough signatures for a referendum, the signatures would need to be verified, before a date was set.

"There is a lot of river to flow under the bridge," Mr Key said. "It's eminently possible that three of the five [assets] would be on the market by the time you even had the vote."

Mighty River Power is the first to be floated on the sharemarket and is expected to get $1.7 billion to $1.8b for the Crown.

Mr Key said yesterday the two other power firms – Meridian and Genesis – would follow, although it had not been decided in what order. The sell-down of those two would add another $3.96b to $4.23b revenue from the programme.

Solid Energy offers another potential $827m to $1.35b, but wide differences of opinion exist over its value, which is thought to be behind its place near the end of the queue for sale.

Air New Zealand's current value points to only about $220m from reducing Government ownership to 51 per cent.

Mr Key said he could "pretty much guarantee" infrastructure spending from the proceeds of the sale would be rolled out before the 2014 election. However, he was "not 100 per cent confident" the full sales programme would be completed by then.

No internal discussions had been held about other assets that could be sold down, he said. "What you can recognise is the ones that have been identified are the bigger entities as part of the SOE [state-owned enterprise] portfolio – it doesn't mean that there aren't other possible entities but these are obviously the larger ones."

Labour leader David Shearer said proceeding with partial sales ignored public opinion.

"Many people have come up to me and say that although they voted for National, they are strongly opposed to asset sales."

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If sold down to 51 per cent Government ownership, sales are estimated to net:

Genesis: $863.87m to $1.04b Meridian: $3.18b to $3.2b

Mighty River Power: $1.77b to $1.82b

Solid Energy: $827.61m to $1.36b

Air New Zealand: $212.69m


Not planned for sale, but if the Government was interested, some options for sale and their overall worth:

Landcorp: $1.35b to $1.4b

NZ Post: $0.9b to $1.06b

Kordia: $0.11b to $0.13b

- Fairfax Media


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