Shares option for settling iwi
Dozens of iwi yet to reach Treaty settlements will be able to choose shares in assets being sold down by the Government as part of their deals.
Finance Minister Bill English has announced up to 65 iwi yet to settle their Treaty of Waitangi claims will be able to choose to receive a percentage of their forecast settlement package in the form of shares when the Government sells down power companies as part of its partial asset sales programme.
English told reporters the shares option is not designed to stave off threatened court action over the water rights issue.
''It's been under discussion for a number of months. I was really initiated by iwi who already had treaty settlements, who had the capacity to buy shares. It became clear that a number of other iwi wanted to buy shares.
''The way it works is they can get in advance payment of their treaty settlement, under quite strict conditions, that allow them to buy shares in the companies.''
He insisted: ''It's not a sweetener.''
The Government had earlier this week announced it would not proceed with a "shares plus" idea for Maori, which would have offered special share packages to iwi with claims on water affected by the SOEs being sold down.
Mighty River Power will, in the second quarter of next year, be the first of four state owned energy companies to be sold down by the Government by as much as 49 per cent.
Meridian and Genesis will be floated in the following year.
Solid Energy and Air New Zealand have previously been touted for a sell-down, though it’s unclear when they will go to the market.
Today's announcement for iwi only applies to the three power companies.
The "on account" offer of shares for iwi yet to settle would require them to pay the market price for shares, English said.
It was "quite different" from the "shares plus" concept rejected by the Government.
‘‘The 'on-account' arrangement simply allows iwi who have not yet had settlements completed to access funds... to purchase shares.
‘‘Those shares are ordinary shares and will be acquired by iwi at the same price and terms as other investors,’’ English said.
‘‘Any amount drawn down will be deducted from the final [Treaty] settlement."
The ‘‘shares plus’’ concept would have created additional rights for Maori, he said.
Treaty Negotiations Minister Chris Finlayson said a similar arrangement had already been used by many iwi in previous settlements.
They must pay the full issue price and any amount drawn down would be deducted from their final settlement.
‘‘It does not change the total amount of Treaty settlements. It simply allows iwi more flexibility about how their settlement money is invested, and we believe it will enhance the share offer programme," Finlayson said.
Settlements could include anywhere up to 12.5 per cent of the value in shares.
A five per cent maximum value applied if iwi were not ‘‘local’’ to the power companies’ assets; a 10 per cent limit for iwi local to the assets and a 12.5 per cent limit for iwi local to assets and with an Agreement in Principle with the Crown and an agreement on the amount for settlement.
If all iwi took up their full entitlement to ‘on account’ shares, about $145m worth of the entire Government share offer would be allocated through the programme.
"Even if all iwi take up their full entitlement and allocate all of it to the Mighty River Power share offer alone, it would still represent less than five per cent of the shares of Mighty River Power," English said.
"However, we anticipate the take-up being less than the possible maximum and it is also unlikely that all iwi will choose to invest their total allocation in a single company."
Iwi would not have access to any loyalty share bonus schemes, he said.