Partially privatised power firm would be a stock exchange giant

Meridian Energy's assets include the Tekapo A and B power stations in the Mackenzie Country. Photo / Supplied

One of the state power companies that could be partly sold if National wins the next election would become by far the biggest firm on New Zealand's struggling sharemarket.

Meridian Energy, the biggest of three power generators the Government wants to put up for part-sale, was valued by two independent analysts late last year at either $6.3 billion or $6.5 billion.

Either value would make it easily our biggest listed company, ahead of Fletcher Building ($4.7 billion) and Telecom ($4.2 billion) and comparable with unlisted dairy co-operative Fonterra ($6.1 billion).

Mighty River Power, also up for partial sale and valued at $3.7 billion or $3.8 billion, would be either our fourth- or fifth-biggest listed company alongside Contact Energy ($3.8 billion).

The valuations, published on the Crown Ownership Monitoring Unit website, reveal the huge potential impact of the proposal flagged by Prime Minister John Key on Wednesday to sell up to half the shares in Meridian, Mighty River, Genesis Energy and coal company Solid Energy.

The four companies, collectively valued at about $13.5 billion, would boost the total value of firms listed on the stock exchange by a quarter.

But new evidence also points to risks that the sales could push up power prices. Labour and NZ First strongly oppose the sales, guaranteeing that they will be a key issue in the election due by November.

• Selling shares in state-owned enterprises is already shaping up as the defining issue of this year's election. Turn to A10 for this week's Cover Story, which summarises what you need to know about asset sales, including arguments for and against.