By Mark Reynolds
The Government plans to prevent the public "double-dipping" in the float of Contact Energy by requiring individuals to supply their IRD numbers with applications for shares in the company.
The tax-number requirement is designed to stop investors applying for shares in the electricity retailing and generation company using bogus
names. Small investors are likely to be tempted to lodge more than one application for shares because the Government is guaranteeing a minimum public allocation.
The Government is also offering an incentive for investors to show an early interest in buying part of Contact. The Treasury will reserve a parcel of shares that is more than the minimum public allocation for people who "priority register" their interest in the stock.
The priority process will be outlined by the Treasurer, Bill Birch, today.
The process is essentially a way for the Government and its brokers to gauge the likely public demand for shares in the company. It is designed to ensure everyone gets a bite of the Contact apple, and that public anger at missing out on some previous state-asset sales is not repeated.
The public will be asked to register their interest with their own sharebroker, or through a special 0800 number.
The Government is guaranteeing that people who register will be sent an investment statement for an application for shares in the company. However, there will be no guarantee of the number of shares they will receive.
Similar registration systems have been used in Australia to guarantee wide
public shareholdings. Around half of the people who priority registered for the Australian share floats ended up sending in application forms for shares in the companies.
Officials are aware that some people might priority register for Contact shares under several names, with the intention of passing on their allocations to others.
The requirement of IRD numbers is also expected to weed this out.
Publicity for the priority registration process begins tomorrow with a television campaign, to be followed by print advertisements.
The registration publicity will also give advertising agency Saatchi & Saatchi an opportunity to begin branding Contact. The state-owned power company has been around since 1996 but has kept a low profile until it entered the retail electricity market late last year.
The opportunity for priority registration is expected to last about three weeks, with the full sharemarket offer to open April 14.
The shares could be listed in the second week of May.
The Treasury is selling 60 per cent of Contact through the public share float, with the remainder of the company to be sold to a so-called cornerstone shareholder before the end of March.
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