Govt won't sell assets if it can't get a good price - Ryall

Tony Ryall

 State-Owned Enterprises Minister Tony Ryall is keeping the door open to asset sale delays.

“Let me be quite clear here. If the government doesn’t get a good price, the government isn’t going to sell,” Mr Ryall said on TVNZ's Q+A this morning.

The minister wouldn't say what “a good price” would be, but confirmed he has received advice on what that price should be.

Complicating matters, assets won’t be sold “to the highest bidder”, as government seeks to keep assets in New Zealand hands: “There is a tension, a trade-off,” Mr Ryall said.

Not a cent of the profits from Mighty River Power sale will go to pay down debt, said the minister.

“All the proceeds in Mighty River Power are going to avoid us having to get more debt.”

Changing ownership of power companies won’t make any difference to power prices or job numbers, the minister said.

He would give no guarantees of New Zealand ownership of the 49% floated.

"While we’re going to aim to have 85% to 90% of these companies New Zealand-owned at float, what happens after that is really determined by the individual New Zealand shareholders and entities,” Mr Ryall said.

Mr Ryall conceded government would have got more if it had sold to a single buyer, but National wouldn’t have received the support it did at the election if it had done that.

"We would not have the mandate that we got at the election if we had proposed that it would be a 49% sell-off to one shareholder.”

Mr Ryall would not endorse Treasury’s valuation of Mighty River Power ($3.75 billion - or $1.8 billon for the 49% float), saying “We’re going to have to wait to see what comes out from the sales process.”

The Mighty River Power sale is planned for late in third quarter – not in the next few weeks, the minister said. A register of interest in shares won't begin until August or September.

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6 Comments & Questions

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All well and good, but t*rds still can't be polished.

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t*rds can be polished....ETS???!!!???!!?!?!??!!?

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The government should tell us the truth why they are so intent to sell our assets. It makes no sense despite public opposition, financial analysis that suggest the sale does not make economic sense, or the governments inconsistent explanations to justify the sale, to continue with this course. I am open to the concept but now am entirely sceptical to the sale because I don't trust the government and I am covinced that it is not in the best interest of every New Zealander who currently own these assets now and benefits from these. Reference was made to the markets; history has demonstrated that decisions of this nature have not been beneficial for the New Zealand taxpayer.

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The price issue is the first hint of a backtrack. A face saving excuse not to take the SOEs to market.
It's all over rover.

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Can a responsible financial paper like NBR please get it right. The Government is NOT selling assets. It is selling a minority shareholding interest in companies that have business assets. You are falling into the same lazy trap as the financially illiterate general media by talking about asset sales, or have you been suckered into using the same inlammatory language of Labour, the Greens and NZ First. It is no wonder the public don't understand the real situation when it is constantly misreported by people who should know better. opponents

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If I owe $1,000 on my credit card I could play my guitar and use the income from playing to pay the interest and pay down the debt. If one day I sell my guitar then I could use it to continue to pay the interest - but the day will come when I still have debt. have no guitar, and have no income from playing. This is the situation we all face from selling very profitable assets. So why is Key still wanting to do it. FOLLOW THE MONEY - who benefits from the sale process!

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