PM John Key announces deal-sweetener around unpopular asset sales

PM John Key announces deal-sweetener around unpopular asset sales

Prime Minister John Key has outlined details for the upcoming 49 percent float of Mighty River Power, which is expected to happen in September. 

At the National Party conference, held in Auckland, Key announced several measures that look to give average New Zealand investors a foot in the door rather than big buyers. 

Kiwis who want to buy Mighty River Power shares will need a minimum of $1,000, while those looking for $2,000 worth of shares won't have their applications scaled back. 

Key also announced the likelihood of a loyalty bonus scheme whereby investors who held onto their shares for more than a minimum period of time (assumed to be three years) would get bonus shares. 

A retail syndicate of sharebrokers and banks would help potential investors buy shares or find a broker, considered ideal for first-time investors. 

A website has been set up for those interested, called Government Share Offers

The announcements may seem soft to the more right wing; a sale to a single large buyer would get a better price.

However, the government is essentially rendering the asset sales more politically palatable by going after individual investors.

"Let me assure you - we will make it as easy as we can for New Zealanders to take part in the share offers," Key said in his speech at the conference.

Nevertheless, there's nothing to stop investors selling the shares on to off-shore parties, although no one party will be able to own more than 10 percent. 

Key said the Maori Council's water rights claim wouldn't affect the sale. 

"Selling shares in power companies doesn't affect any of the regular and on-going discussions we have about water issues, and won't change the outcome of them," Key said.

Genesis Energy, Meridian and Solid Energy are also on the block for a float next year.

The Green Party labeled the announcement a ploy to gain support for an unpopular move. 

Co-leader Russel Norman said the plan was fiscally reckless and made worse by offering hundreds of millions of dollars in bonuses to wealthy New Zealand investors.

"This is deeply cynical ploy to win the public over to the Government's unpopular privatisation agenda, but it won't work. The New Zealand public will see through it," Norman said.

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