Asset sales a success - Key

STACEY KIRK
Last updated 09:36 04/02/2014

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Prime Minister John Key has defended the Government's decision to go ahead and sell part of Genesis Energy - the final float in the asset-sales programme.

And he said the sale of other assets had been a success for the Government as well as investors.

'Meridian is above its float price. It gets quite a big dividend stock. Air New Zealand is trading above where we sold it," he told Firstline today.

"So in my view, the prices that we could get for Genesis, and this is certainly the advice from Treasury, won't dramatically change because we waited a year, or two years or six months."

Labour has accused Key of "political vanity" for proceeding with the partial sale of Genesis.

Labour leader David Cunliffe said National must be "on some kind of promise to somebody" for the sale.

"Because frankly, it makes no political sense at all," he told Radio New Zealand.

"We know that by a huge margin New Zealanders are opposed to it.

"We know, because Treasury has advised that with the Government now making less than they predicted [from the asset sales] - actually they're making no money at all because by the time you take off the $150 million already spent on ticket-clippers - Treasury says that the loss of dividends is roughly equal to the cash received."

But Key said that if anything had hampered the asset sales, it was the Opposition.

Mighty River Power was this morning trading at $1.98, down from last year's listing price of $2.72.

But what wasn't necessarily good for mum-and-dad investors, was good for the Government.

"The great irony is of course one argument you could make is the Government sold Mighty River Power for $2.50, maybe it was smarter than people thought because it's trading below that," Key said.

"Now actually, we wanted it to do well. But you do have to say a couple of things: I mean for one, it's been confused by policies from the Opposition - it hasn't helped the power stations.

"Secondly, it has a bonus issue that a loyalty bonus is embedded in that, so it reduces the price. It has a pretty good dividend stream on the thing."

Genesis is the last state-owned asset to be partially floated under the Government's mixed-ownership programme.

Finance Minister Bill English has signalled further sales were unlikely.

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