New Zealand raises $1.4B from power company sale but lawmakers complain of political meddling

WELLINGTON, New Zealand – New Zealand’s government says it has raised more than a billion dollars from the contentious sale of a 49 per cent stake in a state-owned power company.

But the government says it could have raised more were it not for interference from opposition political parties who oppose the sale. Those parties liken the offer to selling the family silver.

The government Wednesday announced a Mighty River Power sale price of 2.5 New Zealand dollars ($2.10) a share, raising a total of NZ$1.7 billion ($1.4 billion). The shares will begin trading on the New Zealand stock market Friday and will also trade in Australia.

The centre-right government gave preference to local investors over institutions or foreign buyers. It said 113,000 New Zealanders had become shareholders, the most for any listed company. Aside from the government’s 51 per cent stake, about 27 per cent of shares went to retail investors, 9 per cent to New Zealand institutions and the rest to international institutions.

Mighty River Power is the first of three power companies the government plans to sell minority stakes in. The asset-sales program has proved contentious, with many in the country opposing it.

After the share offer opened last month, the left-leaning Labour and Green parties announced a plan to create a single government buyer for wholesale electricity. The parties said the policy, which they’d implement if they won national elections next year, would make electricity cheaper for consumers.

Their announcement dragged down the share prices of power companies already listed on the stock market and forced the government to issue a supplementary risk disclosure to the Mighty River Power share offer.

“Labour and the Greens certainly did their best to damage the offer,” said Tony Ryall, the Minister for State Owned Enterprises.

Finance Minister Bill English said the Mighty River Power shares were valued about 10 per cent higher before the opposition parties’ announcement. He said about 1,800 people withdrew their share purchase applications while many more never signed up.

But Labour Party lawmaker Clayton Cosgrove said it made no sense for the country to sell its money-making assets. He said most of the shares would end up owned by foreign interests, causing profits to disappear overseas.

“It should stay in New Zealand and that’s always been our position,” he said.