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Current as of 23/09/14 07:40PM NZST

Tamsyn Parker

Money Editor for NZ Herald

Meridian listing date announced

The partial sale of the state-owned electricity generator was previously scheduled to take place in November. Photo / Simon Baker
The partial sale of the state-owned electricity generator was previously scheduled to take place in November. Photo / Simon Baker

Meridian Energy is to list on the share market on October 29 - earlier than previously signalled.

Finance minister Bill English and state-owned energy minister Tony Ryall have today announced the timeline for the float in which the Government hopes to raise around $2.3 billion for selling up to 49 per cent of state-owned power company.

Full details of the share offer are to be made available on Friday when the prospectus is officially lodged with the Financial Markets Authority.

The document will be available online from then with the regulator expected to take five working days to check it off.

The retail offer period will officially open on September 30 and run until October 18. The Government had previously said Meridian would list in November.

Investors will be asked to come up with 60 per cent of the share price upfront with the remaining 40 per cent due 18 months after its listing.

The deal gives investors the full benefit of the dividend payment and voting rights while essentially providing them with an interest-free loan until the remainder of the money is due.

Retail investors will also have the share price capped.

An institutional book build will then be held after the retail offer closes to set the price they will pay.

Ryall said the offer process put New Zealanders at the front of the queue for shares and would ensure they have easy access to information.

"To help achieve this, a retail syndicate will be marketing the offer to New Zealanders, and they will offer information and advice to their clients.

"In addition, we have included what is called a 'broker firm' aspect to the Meridian offer. Under this arrangement, brokers assess demand from their clients and submit bids, and the Government then chooses how much to allocate them.

"Just like the retail offer, this process is open only to New Zealanders and is consistent with our commitment to ensuring 85-90 per cent New Zealand ownership of the shares," he said.

Prime Minister John Key said the Genesis Energy partial float was likely to occur first half of next year, and work was already underway towards that.

The Government and officials were also currently working to decide the best way to sell down the Government's stake in Air NZ, but that was likely to be a much shorter process than that for the power companies given it was already listed.

He would not rule out selling Air NZ shares before Christmas this year.

Asked whether the performance of Mighty River Power had been disappointing since the shares went on the market, Key said it was important to think of the shares as a long term investment.

"Let's see how it performs over time."

Asked if the Government was considering selling a lesser amount of Meridian shares, Key said his Government remained "absolutely committed to selling 49 per cent of Meridian".

He stood by the Government's aim of raising $5 billion to $7 billion through its assets sales program but acknowledged the amount was now likely to be closer to the lower end of that range given the difficulties around Solid Energy.

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