Audrey Young

Audrey Young is the New Zealand Herald’s political editor.

Labour and Greens hurt share float, says English

Labour's David Cunliffe with Green's Russell Norman. Photo / APN
Labour's David Cunliffe with Green's Russell Norman. Photo / APN

The chances of the Government raising $5 billion to $7 billion from its partial assets sales is looking dimmer after details of No 2 sale, Meridian, were announced last night.

Finance Minister Bill English conceded that the Government would like to have had more New Zealand investors than the 62,000 and a higher share price than $1.50.

But he blamed in no small part Labour and Greens' energy policy, accusing them of scaring off mum and dad investors from Mighty River Power and Meridian because of their policy to control wholesale power prices.

"They set out to sabotage lower income New Zealanders doing it. Unfortunately they've had some effect."

Unless Labour and the Greens promised to borrow money from overseas bankers to buy back the shares "it's all crocodile tears, hand-wringing and whingeing".

Labour and the Greens described the outcome as "a farce" and "a flop".

Total proceeds to the Government from the Meridian share offer, at $1.50 in two instalments, will be $1.88 billion. Combined with the $1.7 billion in proceeds from the part sale of Mighty River Power, the two floats will raise $3.58 billion. With just Genesis and part of Air New Zealand left to go before next year's election, it may not meet its target.

"We have been saying for a while that we are at the bottom end of that range but we wouldn't want to pre-judge the rest of the programme," Mr English said.

The $5 billion to $7 billion estimated had included Solid Energy in healthier days but the $3.58 billion was $3.58 billion less that the Government had to borrow.

The Meridian price is at the margins of the range of $1.50 to $1.80 a share earlier set by the Government.

The total New Zealand ownership in Meridian will be 86.5 per cent.

Labour state-owned enterprises spokesman Clayton Cosgrove called the process a farce.

"John Key and Bill English threw everything they could at making this sale a success ... [but] just 62,000 people wanted to buy in.

"The number of investors in Meridian is half that of Mighty River, which was half that of Contact Energy when the National Government sold it in 1999 - at this rate of success they will be paying people to buy Genesis Energy shares."

Greens co-leader Russel Norman called the Meridian announcement "a flop" and a waste of money.

"Only 1 per cent of Kiwis bought shares in Meridian.

"The other 99 per cent of us have lost the profits from a strategic asset and can now look forward to higher power prices."

- NZ Herald

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