Government looks at loyalty bonuses for asset share buyers

Tony Ryall

The government is looking at a Queensland scheme where buyers of shares in the state’s railways got $A1000 bonus shares if they did not sell their initial buy-up for a specified time.

Speaking on TV3’s “The Nation" State-Owned Enterprises Minister Tony Ryall said the government was undertaking a market research exercise to see what participants in the sharemarket might want the forthcoming float of four state-owned energy companies to look like.

He said the study would help inform the government about exactly what structure would work best for these floats.

“Clearly, if we're to have as much everyday New Zealander participation, we've got to make it as attractive as we can.”

And Mr Ryall told the Saturday programme the government would look at the Queensland loyalty bonuses.

“Certainly, I think the experience in Queensland has that it has encouraged Queenslanders to hold on to their shares longer.”  

(Although it did perhaps did not help the political popularity of state asset sales overall, which was seen as a contributing factor to Labor's recent loss).

“We'll be considering that over the next few months.

“But I wouldn’t want people to think that that is necessarily going to be a feature of the offer.

“We haven’t made any decisions on that yet.” 

Earlier this week, Chorus shares fell 13% on a draft Commerce Commission wholesale price determination that was more aggressive than anticipated.

However, the spun-off Telecom regained some of lost ground by Friday.

Angry investor Aaron Bhatnagar told NBR ONLINE the government's move had wiped nearly $180 million from Chorus' market cap (to around $1.17 billion), and sent "a very ominous message to those who want to invest in New Zealand infrastructure".

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8 Comments & Questions

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Float the shares in as a clean and natural way as is possible.
It seems the opposition to the share floats are starting to spook some Ministers.
My hope is they "do it right" or let them tuck their tails between their legs and head back to the left where they probably belong.

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I agree with your strategy if a % is to be sold but you are totally wrong regards this being a left or right thing. I can promise that many of my very right wing sympathisers are in the case of energy and water, believe state ownership is a far superior ownership model as NZ proves with the electicity price rip off that competition has failed to deliver. There is no excuse for such bumbling management incompetence in the modern world for running a company for the benefit of shareholders be they taxpayers or investors. This is why so many of 'the right' are anti shonkeys plans. The countries broke, find something else to flog.

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The Government has no place in providing goods and services that private enterprise can provide. The model you are suggesting crowds out new investment and distorts the real price of energy.

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But it wasn't private enterprise that gave NZ rain, mountains, rivers and the countries dams. If however you know a private company wanting to build a nuclear plant I know of some cheap land in Kaipara.

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Same idiotic words from Muldoon when he was campaigning to get elected.

6 years later, this economic baffoon introduced think big and wage and price freeze.

Need we say more?

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Show us the Muldoon quote.
Muldoon was the best leader you lefties never had.

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doesnt matter what type of loyality schemes they put in place that only delays the end game which is that 49% of profits will go offshore just like TEL,CNU,NZR,WBC,ANZ,CEN etc etc etc

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Reply to - Anonymous | Sunday, May 13, 2012 - 10:20am
Try this loyalty scheme - NZ energy share owners take their dividend as a power credit at say a 20% discount - Govt still gets tax on the divi, customers buys cheaper power, company gets loyal shareholders, money gets invested and stays in NZ.

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