Applications for MRP shares may be withdrawn

The Government said it would file a supplementary disclosure to the Mighty River Power share offer to take into account possible additional risks to investors that electricity reform under a Labour/Greens government could pose.

The document is being lodged with the Registrar of Financial Service Providers this afternoon, Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall said in a joint statement.

The existing Mighty River offer document already outlined the principal risks associated with an investment in Mighty River shares, English said.

"That covered the risk that changes in the regulatory environment, including for the wholesale or retail electricity market, may affect the company," he said.

The Labour/Greens proposal is to effectively replace competition with a state agency to act as a single buyer of wholesale electricity from generators, which English said could be material to decisions to invest in Mighty River shares.

"Our advice is also that if Labour/ Greens had announced this policy before the offer began, their announcement would have been referred to in the offer document submitted to the Financial Markets Authority," he said.

The offer closes on May 3 but New Zealanders who have already applied for shares may withdraw their applications if they choose.

The offer documents set out the principal risk associated with investing in Mighty River.

Included in those was the risk that changes in the regulatory environment, including the wholesale or retail electricity market, may affect Mighty River.

"Through this supplementary disclosure document, the Crown and the Company wish to draw your attention to this recent development that increases the regulatory risk for the Company, which could be material to your decision whether to invest in shares," it said.


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