Mighty River shares went to just a few - Greens

Minister of Finance Bill English, Minister for State Owned Enterprises Tony Ryall and NZX CEO Tim Bennett at the listing of Mighty River Power.  Photo / Getty Images
Minister of Finance Bill English, Minister for State Owned Enterprises Tony Ryall and NZX CEO Tim Bennett at the listing of Mighty River Power. Photo / Getty Images

The Green Party says that shares sold in the recent float of Mighty River Power went to only a small group of investors - and claims of widespread 'mum and dad' ownership are false.

They say half of the shares in Mighty River Power sold by the Government went to just 13,000 people, with 10 per cent going to just 400 individuals, trusts and organisations.

Shares in Mighty River listed on the NZX at $2.73 on May 10 and finished the day $2.62 - a 4.8 per cent premium to their issue price. Issued at $2.50 each to those taking part in the float, they closed yesterday at $2.51.

The Government raised $1.7 billion by selling 686 million shares, or 49 per cent of Mighty River to local and overseas investors.

New Zealand institutions were allocated 8.6 per cent of the shares on offer and overseas funds got 13.5 per cent, with both scaled back considerably.

Green co-leader Russel Norman said today that while 113,000 investors bought 26.9 per cent of Mighty River, half of those went to fewer than 13,000 investors who bought an average of nearly $35,000 worth of shares each.

"That included a select group of fewer than 400 individuals, trusts, and organisations who bought 10 per cent of the retail shares with an average investment of nearly quarter of a million dollars each. The remaining 101,000 retail investors bought only 13.4 per cent of the company - less than the amount taken by overseas institutions, " said Norman.

He did not give details in his release of what kind of organisations might be such big investors.

"National's myth that it sold Mighty River Power to ordinary New Zealanders has been well and truly busted. John Key's 'mums and dad investors' line was a con," said Norman.

He said that Treasury had confirmed the Greens analysis and that half of the Mighty River retail shares had gone to just 0.3 per cent of the population.

Under its so called mixed ownership model (MOM), the Government has sold its 49 per cent stake in Mighty River but has retained a controlling interest.

Total New Zealand ownership of Mighty River stood at 86.5 per cent per cent after the allocation process, with overseas institutions ending up with 13.5 per cent.

Mighty River's share loyalty scheme means domestic investors will receive one loyalty bonus share for every 25 shares they hold for two years from the offer, up to a maximum of 200 bonus shares.

In last week's Budget, the Government confirmed that Meridian Energy would be the next in line for partial privatisation - a sale that is forecast to raise up to $3.25 billion.

Total value raised by Govt in float - $1.7b

Number of NZers who bought shares - 113,000
Number who pre-registered - 440,000
Average value of shares purchased - $8220

Percentage of shares staying in NZ hands: 86.5pc - $943m
Percentage owned by NZ 'retail investors' - 26.9pc
Percentage owned by NZ institutions - 8.6pc - $300m
Percentage owned by overseas institutions - 13.5pc - $472m
Applicants without a CSN - (suggesting first time investors) - 68pc


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