Government dangles small carrot to Mighty River early birds
The government is offering an incentive of sorts to New Zealanders who pre-register their interest in buying Mighty River Power shares.
Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall officially launched the pre-registration period for the partial float today.
“Mighty River Power pre-registration is now officially launched and we invite New Zealanders to participate,” Mr English says.
He says Kiwis who pre-register “may be” allocated up to 25% more shares than people who don’t.
The idea is to get as many people as possible in the door so the government and its advisors can gauge demand for the shares, likely to go on sale in April for a mid May listing.
The government has already announced that New Zealanders applying for up to $2000 of shares will be guaranteed that amount.
"However, if demand exceeds the number of shares available, then New Zealanders who request more than $2000 worth will have their bid scaled back."
Hence the incentive to register early and be in line for possibly up to 25% more shares than those who don’t.
But that would depend on the level of demand.
To pre-register for shares, New Zealanders can go to the website www.mightyrivershares.govt.nz (which fellover this morning) or call 0800 90 30 90.
The government today launched an up to $1.4 million advertising campaign designed to motivate action.
Mr Ryall says pre-registration is not an obligation to buy shares, just an expression of interest.
No money is being sought at this stage.
“That opportunity will come next month and there is no hurry to preregister so long as it’s done by March 22.
Mr English says the share offer is designed to achieve widespread New Zealand ownership.
But there was a balancing act to achieve a good price to free up capital for priority areas without having to borrow more.
Global institutions will also be offered shares and that will help create price tension, he says.
The government will continue to hold 51% of the shares on issue.
The government is aiming to ensure 85 percent to 90 percent of Mighty River, including the government’s stake, is owned by New Zealanders. Although there is nothing to stop local shareholders onselling to overseas buyers, the government has floated the idea of loyalty bonus shares to incentivise small holders to hold on to their stakes.
There was no further detail on the loyalty bonus today.
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Comments and questions13
The website is really slow - perhaps it's a sign of the interest in buying these shares?
Looks like their website is responding slowly under the load.
I did it in 2 minutes, must be your connection
How do us overseas based citizens pre-register?
I don't think you can.
I am a NZ citizen and am overseas for the pre-registration period. The registration site says I must be in NZ to pre-register. Apart from returning to NZ how can I pre register? An 0800 number is not accessible.
Ajax Error 0
and super slow if not impossible...
would have been better to spend the $1.4m on better IT
I wonder why they require people to be in New Zealand to get the bonus, why is being a citizen not enough.
Also odd that my broker wont let me view details on their website due to my IP address but the government one simply requires me to tick a box saying I am in NZ and then proceeds to the next section (I'm in Aussie by the way).
RJP - use a VPN service with a server in NZ so that you present with an NZ IP address.
When I tried to register the website crashed three times, so I used the phone service. An operator answered my call within 2 minutes. The phone service was very good and the process was easy - took a few minutes in total.
It's all for later political grist
Tax paying permanent residents and citizen residents works fine by me. A NZ citizen who has been outside of New Zealand for years, and who pays no taxes in NZ, should not feel that they have any particular right to these shares at IPO. They should get treated in exactly the same way that other foreigners who don't live here and who don't pay any tax here are treated.
Thanks Anon #8. I am not familiar with VPN but will check it out.
Anon #11 provides some fair comment but does he/she recognise that many NZers overseas still pay NZ taxes and maintain a NZ residence and some even paid income tax for their entire working life and continue to pay tax on their pensions. Maybe a too general condemnation.