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Iwi eye 20% share in power company float

An alliance of Maori tribes has expressed interest in buying around 20% of any state owned power companies put up for partial sale by the National government.

Ngai Tahu chair and Iwi Chairs Forum member Mark Solomon told Radio New Zealand’s Nine to Noon that iwi are interested in buying shares and have been interested for a few years now.

John Key told the station’s Morning Report that his most accurate prediction was that sales could proceed from late 2012, with Mighty River Power or Genesis Energy most likely to be first in line.

However, Mr Solomon said that decisions to purchase these shares depend on the sale process and would be subject to full due diligence of the assets.

He also said that a partnership between iwi and government would prove to be profitable as iwi will never leave the country and that earnings will remain in New Zealand to be re-invested.

Mr Key has told media a lot of work has been put into making these sales possible, including changes to the State Owned Enterprise Act.

More by Robert McCambridge

Comments and questions
18

Sounds like a great idea but the Iwi don't have the money. Ngai Tahu has $700M of assets and Tainui roughly the same so they can't fund 20% of the new power companies.he majority of their assest are long term assets that are not quickly able to be liquidated to release cash.

One would hope that the Government is not expected to fund Maori into these assets as part of the coalition deal with the Maori party. Ngai Tahu has a top up clause on their treaty settlement from the late 1990's based on what other Iwi settle their claims with the Government - ie if they settle for higher amounts in comparison to Ngai tahu's settlement then the Government has to top up Ngai Tahu's settlement. If this occurs it will once again be the taxpayer funding the Maori investment in the Government assets - not good

Can they afford 20%? How much of their asset base is in cash and how much in realisable assets (that they are willing to sell).

I am happy for them to take a preferential allocation but not at a discount and they should be bound to hold for a set period as well, or have to give Govt first right of refusal.

Ngati Whatua o Orakei didn't have the cash to purchase the 20 hectares of railway land in 1996 either. That didn't stop them buying the land and getting it developed.

So before you write them off as having no cash, you need to look at what options they have to buy the shares.... I don't know what those are but it seems no-one else has as yet either...

User - I agree but the Railway land was always going to be a cashcow that they could raise finance against (is that how they purchased it???). The power Co's should have an ok yield but I don't expect they will want to gear them to highly.

So what we need is a respected financial news paper to do some thorough investigative journalism. Anyone know any? ;)

I understand that the iwi sold development rights and the ground lease rentals for a specified period to a developer who paid them up front to fund the purchase.

It was a long term play that required patience (they are only just about to get their first rental stream in the next year or so) but ultimately they got their land improved and what will be a solid rental stream when they had nothing except an offer from the government to sell the surplus land.

Possibly, Ngati Whatua and the other iwi will be in a similar position this time around and if they are patient and see the long term play then options open for what will be some great yield dividend stocks - presuming the government will want to keep their share rolling into the consolidated fund and the business model for utilities.

Isn't Sandy Maier [ex SCF] on the board of Ngai Tahu [Aug 2010]? He'll find the 20%!!!

Sandy maier sure is on the Ngai Tahu Holdings board

Funnily enough he got apppointed to that board in early August 2010 when the South canterbury Finance sale process was in full swing. Then a day after the Government rejected all offers ( 31 August 2010 ) Sandy came up with an offer with Duncan Saville and Ngai Tahu - the day after I repeat - how bizarre.

A suspicious person would put one and one together and come up with the view that this scenario reeked of unprofessional unethical behaviour. I suppose you had to know all the facts to think that Sandy Maier had bad intentions.

There seems to be some common denominator between Sandy Maier's SCF involvement and Ngai Tahu now advising it's strong interest in investing in the Govt assets - namely the Government

It is also more than a coincidence that the authorities have not investigated the actions of Sandy and the SCF board post his appointment as CEO of SCF and pre the SCF receivership

Anyone else would have been investigated and probably sanctioned or charged for some of the decisons and statements made to investors of SCF.

Would be much happier for Kiwi Saver to get hold of a slice.

I dont think the 10% cap should be broken for anybody.

Let's just look at the facts

The National Government can't commit to the sale of the Government assets until December 10th when all the special votes are counted and the final make up of the next Government is finalised - ie they can't make any commitments until then

There is a strong chance that the Government will not keep the Christchurch central and Waimakariri seats after special votes are counted which will mean they only have 58 seats rising to 60 with United Future and Act

And for the record there is no guarantee the Maori constituency will agree to the Maori party on agreeing to the partial asset sales.
They will require about 40 hui over the next month to get agreement'

So a long way to go before National can consumate a deal - if at all

You are wrong about the Christchurch Central and Waimakariri seats. Under MMP, the number of seats National gets depends on its share of the total party vote for all parties across NZ. So, the outcome of the candidate votes in these two electorates will not affect the 60 seats National has. It may affect the individual MPs involved, but it does not affect their party's share of the total party vote across NZ.

Anon 4.48pm - there are more than 1 iwi so the 10% might not be breached even if they in combination did get 20%.

Anon 4.29pm - losing electorate seats wont effect the total number of seats National gets - it is the party vote that matters.

Are you sure about that

I thought that you got whatever electorate seats you won then the percentage of the vote kicks in

You may well be correct - just shows what a bloody confusing system MMP is

Whilst focusing on the big Iwi, don’t forget the smaller ones. Some who got $20-40 million have since sold rights to their fishing etc and could be cashed up. This is a consortium of Iwi not just the big boys. Who would have a problem if they had the cash to take 20%. That leave 29% for the rest of NZ, the Super Fund various fund managers AXA, AMP, Westpac, ASB etc. Quite a large pot.

Maybe Mark Solomon should arrange a number of hui's for the Ngai Tahu whanau before committing their money

Like the Maori party ( who are going back out to their people ), Mark olomon does not have an open ended mandate to do whatever he gets sucked into by his government mates. It's not his money.

Don't worry, Luigi Peters will open SCF's "can of worms"!

Have no problem with iwi buying the power companies, as long as it is the same price as everyone else, they dont borrow to do it, the dividend proceeds are used to create jobs for their less fortunate.

Unfortunately, I dont have alot of confidence with any of those things happening, however hopefully it raises issues for the wider community.

The less we have to sell offshore the better. We as a country have a massive investment deficit already.

Edited