Govt to offer 65 iwi power company shares
"It's become all about selling the share sale politically. Getting the best price for the taxpayer, and reducing debt, has been lost as an aim."Featured comment
BUSINESSDESK: The government will offer shares in partially privatised power companies as part of outstanding Treaty of Waitangi settlements with 65 iwi yet to cut a deal, Finance Minister Bill English and Treaty Negotiations Minister Chris Finlayson have announced.
The surprise move comes just two days after the government shot down the "shares plus" option proposed by the Waitangi Tribunal as a way to deal with Maori claims to rights and interests in freshwater, which the government says is owned by no one.
The issue has been a stumbling block to the government's Mixed Ownership Model plan to sell minority stakes in up to five state-owned energy companies and the national airline.
Iwi which have not settled can choose to take a portion of their package in shares, Messrs English and Finlayson say.
Treasury estimates show that if all iwi take up the offer, shares worth about $145 million could be distributed over the course of the entire partial privatisation programme.
"We anticipate the take-up being less than the possible maximum, and it is also unlikely that all iwi will choose to invest their total allocation in a single company," Mr English says.
"It simply allows iwi more flexibility about how their settlement money is invested and we believe it will enhance the share offer programme."
The announcement comes days after Prime Minister John Key quashed hopes among some iwi the government would subscribe to a "shares plus" proposal that would grant stock in the power companies to iwi in compensation for ceded water rights.
The government argues it can address Maori claims by other means but will not cede public ownership of the waterways. Tainui tribal authority official Parekawhia McLean resigned from Mighty River Power's board last week, reflecting Tainui's high-profile advocacy for the "shares plus" concept.
The level of scrip offered to Treaty claimants would be dependent on each situation, with a 5% cap for iwi not local to any of the power companies' assets, a 10% limit on those considered local to a power company and a 12.5% maximum for iwi local to a firm which had reached an agreement in principle and a quantum amount.
Shares issued as part of a Treaty settlement won't be eligible for the government's proposed loyalty bonus to attract retail investors to the floats.
Mighty River Power will be sold in the second quarter next year, followed by Genesis Energy and Meridian Energy in the following 12 months, subject to market conditions, the ministers say.