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Finance Minister Bill English and Minister for State Owned Enterprises Tony Ryall will tomorrow officially launch the pre-registration period for New Zealanders who are interested in finding out more about the Mighty River Power share offer.
“National campaigned on this policy at the election in 2011 and it has been extensively discussed before and since then,” Mr English says.
“It has been through the High Court and the Supreme Court where the Government has won both cases and now, at last, it’s time to get on with it.”
Mr English says the initial public offering of up to 49 per cent of the Government-owned power company is an opportunity for New Zealanders, including those who have not owned shares before, to invest in the stockmarket.
The announcement that the pre-registration period will begin tomorrow is one of the decisions confirmed by Cabinet and announced today. Pre-registration will allow New Zealand retail investors who are interested in finding out more about Mighty River Power shares to register their interest.
“Tomorrow will also see the start of a substantial advertising and communications campaign covering television, print and online media which will raise awareness of the IPO, and tell people how to pre-register,” Mr English says.
“That campaign will include a strong investor education element for those unfamiliar with the sharemarket. We strongly recommend investors obtain their own independent financial advice”
Ministers also announced today that they expect that the share offer document will be lodged shortly after the pre-registration period ends and that there will be a three-week offer period.
At the end of that, the book-building process will take place before ministers decide on the share price and the allocation of shares. Those decisions will include how the shares will be allocated between New Zealanders and overseas shareholders.
The Government expects this process to be completed in mid-May.
The share offer had been designed to put New Zealanders first, Mr Ryall says.
“Mighty River Power will apply to be listed on the NZX main board. We expect that its primary stock exchange listing will be in New Zealand.
“We also expect it to have a secondary listing on the Australian Stock Exchange. There is nothing at all unusual about this – eight of the 10 largest New Zealand listed companies are already dual listed in Australia.
“There is a balance to be struck here. On the one hand, we have given New Zealanders an absolute commitment that Kiwis will be at the front of the queue for shares.
“On the other hand, we want to ensure there is enough tension in the share price for investors. A secondary listing in Australia will help to achieve that.
“Another point worth noting is that some Australian institutions, under their own investment mandates, would not be able to invest in Mighty River Power unless it was also listed in Australia.”
Mr Ryall says the website for pre-registration and for the share offer itself has been designed to restrict people from outside New Zealand from participating.
However, the IPO will be open to certain institutional offshore investors because that will help ensure New Zealand taxpayers get the best price for the shares being sold. Ministers expect around 85-90 per cent of shares to be held by New Zealanders after the share offer.
Other decisions confirmed today include:
· The minimum application for shares will be $1000, increasing in $100 increments.
· New Zealanders applying for up to $2000 worth of shares will not be scaled back if the IPO is over-subscribed.
· A loyalty bonus will apply for New Zealand retail investors who keep their shares for a minimum period. The terms of that bonus will be announced before the share offer opens.
Mr Ryall said more details about the pre-registration process will be announced tomorrow.