After months of delays, the Government's flagship partial asset sales policy gets underway tomorrow with a $1 million advertising blitz to promote the sale of Mighty River Power shares to would-be investors.
Prime Minister John Key this afternoon confirmed Cabinet had just passed the Order in Council, the final part of enacting the legislation that allows for the sale of Mighty River under his Government's mixed ownership model policy.
Originally scheduled for late last year but delayed by the Maori Council's legal challenge which was finally defeated in the Supreme Court last week, the Government is now racing ahead with the Mighty River sale.
"At last, it's time to get on with it," said Finance Minister Bill English.
English said he and State Owned Enterprises Minister Tony Ryall would launch the "pre-registration" phase tomorrow at Mighty River's Auckland headquarters.
Pre-registration will allow retail, or "mum and dad" investors, to find out more about the share sale and give the Government and its advisors an idea of the retail demand.
"Tomorrow will also see the start of a substantial advertising and communications campaign covering television, print and online medial which will raise awareness of the initial public offer," said English.
"That campaign will include a strong investor education element for those unfamiliar with the sharemarket. We strongly recommend investors obtain their own financial advice," he said.
After the pre-registration period, the Government will assess demand and if it decides to go ahead, details of a loyalty bonus scheme will be announced before the offer period starts in mid-April.
If the issue is given the green light by the regulators, investors can apply to buy shares through brokers or directly through the ASB and ANZ banks.
The offer document will have a price range and the final price is set during a two-day bookbuild period, after applications from the general public close.
The Government hopes to have the shares listed by mid May.
Key this afternoon said the share sale would be a "highly political process" and his Government intended keeping its promises about ensuring a high level of New Zealand ownership.
It has pledged that between 85 per cent and 90 per cent will be held by New Zealanders, including its own 51 per cent stake.
"We're confident we can achieve that," he said.
However, English confirmed that Mighty River would have a secondary listing in Australia.
"There is nothing at all unusual about that" he said, pointing to a number of leading New Zealand companies which are dual listed.
The dual listing was intended to ensure price "tension" but English reiterated that New Zealand retail investors would be "at the front of the queue".
The Government has already said the minimum share parcel will be $1000 and parcels of up to $2000 will not be scaled back.
SOE Minister Tony Ryall said the offer of shares to retail investors would be restricted to those in New Zealand.
He also confirmed that as part of the offer, Mighty River Power employees would be guaranteed a minimum of $5000 worth of shares each in the offer if they wanted them.
Commenting on the previously announced provision for iwi who have yet to settle treaty claims to buy shares "on account" during the sales process, English said that "won't be a large amount".
What proportion of the $5 to $7 billion the Government hoped to raise through the sale of Mighty River Power would become clearer when a price range was set during the sales process, but English noted the company was currently valued at about $3.6 billion.
Labour Leader David Shearer said the sale meant New Zealanders were being asked to buy what they already owned.
"John Key says he's committing to keeping 85 per cent in New Zealand hands but to do that thousands of Kiwi families will have to spend at least $1,000.
"John Key can't explain how he is going to ensure that at least 70 per cent of the shares go into the hands of New Zealanders, apart from spending $1 million on an advertising campaign. He still refuses to explain how his loyalty programme will work."By Adam Bennett Email Adam