The Government has increased the sweetener on the sale of Genesis Energy. Shares in New Zealand's largest electricity and gas retailer will be sold for between $1.35 and $1.65 each and there are 1 billion on offer.
Each investor will get one bonus share for every 15 they buy - much more than what Mighty River Power investors got. The bonus shares will be capped at 2000 shares per investor.
State Owned Enterprises Minister Tony Ryall, left, and Finance Minister Bill English at the announcement. Photo: RNZ
Finance Minister Bill English said on Thursday that the Government is drawing on lessons from sale of Mighty River Power and Meridian Energy last year.
Mr English admits there may be less demand for Genesis shares, as it is the last state-owned enterprise off the block to be partially sold, so the bonus scheme has been made more attractive.
"In each case, there's been a different way of testing demand and encouraging it. And in this case at this stage of the programme with the last float, we just simply came to the judgement that a more attractive bonus scheme would work better for Genesis."
Other measures include a simplified investment statement aimed at retail investors who baulked at the full prospectuses issued by Mighty River Power and Meridian Energy.
For the first time, investors will also know the final share price before they buy - which Mr English said he hoped would also increase demand.
The Government plans to sell between 30 percent and 49 percent of Genesis. The final price will be set on 28 March and the company will list on the sharemarket on 17 April.
Russel Norman. Photo: RNZ
The Labour Party said on Thursday the Government is ramming the sale through so it is out of the way before the general election on 20 September this year. State-Owned Enterprises spokesperson Clayton Cosgrove says the sale is going ahead at the worst time.
"They are well short, well short - in fact below the bottom of the range - for the $5 to $7 billion projection that Bill English said he'd get for the taxpayer.
"Basically, it is yet another fire sale - selling at any time, at any cost, to just get it off the books for an election and the taxpayer loses."
The Green Party criticised the way the shares will be sold, saying taxpayers will again pick up the cost of the Government's partial privatisation programme. Co-leader Russel Norman says only wealthy people who got tax cuts can afford to buy the shares.
"To rub salt into the wound, the people that buy shares are given an extra free share for every 15 that they hold - if they hold them for a year - and of course, the taxpayer has to pay for that extra free share.
"On top of that, Genesis customers are facing big increases in power prices and that's in order to pay for the big dividends that they're proposed in the prospectus, which is up to 16.5 percent."