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.