Buyer emerges for shares in SOEs

Tower has emerged as a potential investor in the government's proposed partial sale of state assets.

That is despite Finance Minister Bill English admitting at the weekend that the amount the government had budgeted to make from the sales may not be reached due to the global financial crisis.

Tower's investment head Sam Stubbs said on Radio New Zealand this morning that the minority stakes in four state-owned energy companies, along with an increased amount of shares available in Air New Zealand, were very appealing and should fetch a good price.

He said although it was possible, given the state of the global economy, that they could be sold for less than the $5-7 billion the government has budgeted for, he did not expect wild volatility in sale prices.

Yesterday on TV One's Q+A programme, Mr English admitted that he could not say for sure exactly how much the government might get for its proposed sale of a 49% share in the four state-owned enterprises, despite what it had budgeted to make.

“There’s no guarantee,” he said. “Bear in mind we’re talking here about 3% of the government’s assets, that our assets will continue to grow and that dividend flow will continue to grow. With respect to market conditions, we get to make the decisions as we go along, but it’s our belief as the owner of these assets that they’re going to be attractive to investors.

“These [companies] are of considerable worth. I mean, people pay their power bills every week. They feel like they’re paying a lot. That is what underpins the value of these companies, so they’re certainly worth a lot of money.”

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2 Comments & Questions

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Given what an incomparably low level of morals and ethics Tower have shown the people of canterbury unfortunate enough to have insurance with them. Tower will be a wonderful owner of a power company.....Even the national bank dumped them.
When you are dumped by a bank you really are able to walk under a snake.

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Tower hasn't "emerged".

All NZ share funds (including kiwisaver funds), will be potential shareholders as they will form a portion of the nzx50 index. Most funds, even active funds, mirror the main index to some extent.

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