Mercury Energy First To Be Sold By Government
December 15 2011 Categorized Under: Genesis Energy, Mercury Energy, Meridian Energy, Mighty River Power, Power News, Switchme News No Commented
New Zealand owned power company Mercury Energy will be the first state owned enterprise to be privatised in the government’s plans to sell minority stakes in five SOE’s over the next three years.
Mighty River Power which trades as Mercury Energy in the electricity retail market has been considered as the most ready for sale of up to 49 per cent of its shares which will be sold on an open market. The government will remain with a minimum 51 per cent controlling stake.
Finance minister Bill English and SOE Minister Tony Ryall assured Kiwi’s that the part-sale would put New Zealanders “at the front of the queue” for share allocations and that no single share holder other than the government would be allowed to own more that 10 per cent of any of the companies that will be put up for sale.
They gave no clues as to which state owned company would be the next on the list for part privatisation, but have identified Meridian Energy and Genesis Energy, along with coal mining company Solid Energy and airline Air New Zealand as prime candidates for sale.
The timing of the sales will depend on market conditions and company circumstances the ministers advised.
Ryall has stated that the government will probably stump up around $100 million in fees to investment banks preparing the partial sell-down of the New Zealand owned power companies.
In a media briefing in Wellington he spoke about the mixed ownership model being a “very very big programme’ but he wouldn’t expect to pay hundreds of millions of dollars for it. It would be “more around $100 million”. That would work out to be around 1.8 per cent of the sale price, which is in line with the costs relating to the privatisation of Contact Energy in 1999.
Ryall had told Parliament’s Commerce Select Committee the Treasury’s range of fees would be between 2 and 9 per cent at the higher end of the scale. Treasury officials expect that Mighty River Power could raise as much as $1.8 Million.
Bill English talked down the threat to the programme caused by volatile financial markets, saying the prospect of a steady return from utility companies was more attractive that other investment opportunities, and is a better method of clamping down on new government debt.
If you’re with Mercury Energy, now would be a good time to do an energy comparison and find a better deal. You will find a cheaper power company!
Finance Minister Bill English announces first SOE sale...
Source: yahoo.com/news