Genesis shares end first day up 17pc

Photo / Christine Cornege

Shares in the partially privatised Genesis Energy soared 16.8 per cent at their debut listing on the NZX this afternoon, buoying other listed energy companies in the process.

Genesis closed up 26c to $1.81 after listing, giving holders of the 49 per cent that was sold an immediate gain of about $135 million. Heavy public interest in the last chapter of the government's partial privatisation programme briefly crashed the NZX website within half an hour of the listing.

Fellow state-controlled gentailers Meridian Energy and Mighty River Power also advanced after the listing, rising 1.7 per cent to $1.175 and 1.1 per cent to $2.21 respectively. Contact Energy, which was fully privatised in 1999, gained 1.5 per cent to $5.58 while Infratil-controlled TrustPower gained 1.2 per cent to $6.53.

"What it has done is created demand for other electricity generators listed on the market as well," said Grant Williamson, director at Hamilton Hindin Greene. "It's a very nice premium for investors who have got shares."

Williamson expected the share price to take two weeks to settle, as supply and demand for the stock evened out.

"Certainly looking at the future dividend yield and such like the stock still doesn't look that expensive even at these levels," he said. "There will be good interest in the shares particularly from income investors."

Speaking at a listing ceremony at the NZX headquarters in Wellington, Finance Minister Bill English said.

"taxpayers get a good deal and we believe we've got a pretty good deal across the whole programme", referring to the four asset sales over the last 13 months, which have raised a total of $4.7 billion.

"We went to the market where $1.55 was a better price than expected but markets shift," said English. "We've had different experience with Meridian and again with MightyRiverPower."

While Meridian shares are trading above their $1 a share issue price last November, MRP shares are still nearly 30c below their listing price last May of $2.50 a share.

Green Party co-leader Russel Norman said the Genesis price stag showed taxpayers had "missed out on an additional $130 million of revenue by the National Government mispricing Genesis Energy."

The sale of 49 per cent of Genesis raises $733 million and the company is the last of three vertically integrated electricity generator-retailers to be subject to partial privatisation in the last 13 months.

The IPO process attracted 68,000 retail investors, giving the stock the third largest share register among NZX-listed shares. Meridian Energy drew 62,000 shareholders while 113,000 people bought into MRP, the first IPO of the government's programme.

Genesis Energy

2012 Revenue: $2.270 billion
2012 Net Profit: $90 million

Government expects to raise between $700 million and $1.1 billion from selling a 49% stake.

Operates a mix of thermal and renewable power stations with a total capacity of 2141MW:

• Huntly thermal power station - gas/coal.
• Tongariro power scheme, Taupo - hydro.
• Waikaremoana power scheme, Wairoa - hydro.
•Tekapo A &B, Mackenzie Country - hydro.
• Hau Nui, Wairarapa - wind.
• Holds a 31 per cent stake in the Kupe (off the Taranaki Coast) - oil and gas.

Chairman: Jenny Shipley
Chief Executive: Albert Brantley
(Based on Genesis February 2013 figures)

Read the full Genesis Energy share offer statement here