Genesis fire sale: asset sales net under $5b

The last of National’s failed asset sales is yet another fire sale – with this time the Government ruining the books of Genesis,Labour’s SOE spokesperson Clayton Cosgrove says.

“It is now official: National’s asset sales policy has failed. At the last election John Key promised Kiwis the sales would raise between $5 billion and $7 billion.

“Selling Genesis off at $1.55 a share will raise little more than $700 million, leaving John Key more than $300 million dollars short of his $5 billion to $7 billion asset sales target. That’s failure by any standards, especially given Morningstar valued 50 per cent of Genesis at $900 million.

“The brokerage, legal and PR fees run into well over $100 million.

“Asset sales were mad economics driven by political vanity. To top it off the Government has used the sales as a slush fund, linking them to every new policy while spending it on the likes of failed SOE Solid Energy, advertising materials for the sales themselves, more money for the failing UFB project and the bonus scheme for Mighty River Power.

“National promised the sales would pay for new assets. Instead they have been used to pay for the Government’s mistakes.

“National’s other broken promise was to put Mum and Dad investors at the front of the queue. Now we know that just nine per cent of shares are going to normal Kiwi families – the rest are going to institutions here and overseas.

“John Key promised the world to Kiwis from asset sales. Kiwis trusted him then – they will be much more cautious now,” Clayton Cosgrove says.

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