27 May 2013

Govt admits asset sales program in deep trouble

National has admitted that its asset sales programme is a failure with its decision to consider selling Meridian Energy in blocks, Green Party Co-leader Dr Russel Norman said today.

Media reports suggest Meridian's 49% shareholding may be sold down in blocks by the National Government.

“As shares in Mighty River Power hit a new low, the Key Government knows it cannot sell 49% of Meridian Energy in one hit in the current climate,” Dr Norman said today

“Unfortunately, rather than biting the bullet and calling a complete halt to its asset sales program it is pushing ahead with a foolish plan to sell Meridian Energy in chunks.

“The Mighty River Power sale was a mighty flop and the Key Government knows that pushing ahead with another sale will result in even fewer shares going to ‘mum and dad investors’.

“Despite spending millions on advertising the truth is that 98 percent of New Zealanders bought no shares in Mighty River Power at all.

“The Government simply can’t get the numbers of ordinary New Zealanders to buy shares in its asset sales program.”

According to Milford Asset Management, at least 170,000 retail investors will have to buy Meridian shares to match Mighty River's retail ownership. Only 113,000 participated in Mighty River’s sale, despite 440,000 people pre-registering their interest.

“Mighty River Power shares have for the most part gone to a small group of wealthy New Zealanders, companies, trusts, and overseas investors,” Dr Norman said.

“Most New Zealanders do not want to buy shares in companies they currently all own.

“It is time for the Key Government to listen to the concerns of commentators, the business community and ordinary New Zealanders and cancel its economically disastrous asset sales program.”

ENDS

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