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SOE selloff: 15 percent stake for foreigners

New Zealanders will be at the "front of the queue" for shares in SOEs and will retain ownership of at least 85-90 percent of those companies, according to the National Party.

New Zealanders will be at the "front of the queue" for shares in SOEs and will retain ownership of at least 85-90 percent of those companies, according to the National Party.

In a speech delivered on finance minister Bill English's behalf, SOE minister Tony Ryall has told the Institute of Finance Professionals that foreigners would own up to 15 percent of state-owned assets to be partially sold off under the government's election plan – and no one investor would be allowed to own more than 10 percent of an SOE's shares.

The partial sales would raise $5-7 billion and the government will retain at least 51 percent control of the five companies it is looking to sell a stake in: Solid Energy, Meridian, Mighty River Power, Genesis and Air New Zealand.

"We have also promised that New Zealanders will be at the front of the queue for shares," Ryall said.

“We would rather pay dividends to New Zealanders than interest on rising debt to foreigners.”

Kiwis were hungry for investment options, he said, particularly in the wake of finance company collapses and the falling real estate market.

He said investors currently owned more than $300 billion in investments (excluding their own homes), from term deposits to rental properties.

KiwiSaver schemes already manage around $9 billion in investment funds, a number tipped to double in the four years ahead. According to Ryall, New Zealand financial institutions have around $59 billion of funds under management, and Crown financial institutions including the ACC and NZ Super funds hold nearly $40 billion while iwi have an estimated $10 billion of assets.

Final arrangements for the mixed ownership programme will be made next year, after the government takes the policy to voters in the election.