New Zealand announced Monday it will sell 49percent of a state-owned energy company and list the shares on the country'sstock exchange in about mid-May.
Mighty River Power is the first of three power companies thegovernment plans to sell minority stakes in. It hopes to raise billions ofdollars and return the country's books to the black.
The government said it will sell 49 percent of the companythrough a share offer that will open about mid-April. The company is valued at3.6 billion New Zealand dollars ($3 billion), meaning the listing could raiseabout half that. It will also be listed on the Australian stock exchange,likely to attract financial institutions there to buy shares in the initialpublic offering.
Many New Zealanders oppose the plans, which some equate withselling the family silver.
The government promised to favor so-called "mum anddad" investors by offering New Zealand retail investors a loyalty bonus,the details of which have yet to be announced. It also promised that small NewZealand investors applying for up to 2,000 New Zealand dollars ($1,650) worthof shares would get their full allotment even if the IPO was oversubscribed.
"As promised, New Zealanders will be at the front ofthe queue for shares," Prime Minister John Key said at a media conferenceMonday.
David Shearer, leader of the opposition Labour Party, saidin an interview that New Zealanders are "overwhelmingly" against thesale and that his party would put a halt to the asset-selling program if itwins next year's general election. He said he couldn't promise it would buyback any shares already sold by then.
"We were shocked to hear that shares will be offered onthe Australian exchange as well," Shearer said. "The promise hasalways been that New Zealanders would be at the front of the queue, but thisseems to reach out for corporate investors."
The government last month won a Supreme Court ruling whichallowed the sale to proceed.
Indigenous Maori had argued they held traditional rights tothe Waikato River water that is used by the power company to generateelectricity. The Maori Council argued a listing of the company would prejudiceits financial claims to those rights, but the court found that a partial salewouldn't impede the claims.
The government also plans to sell 49 percent stakes inGenesis Energy and Meridian. The planned sale of a minority stake in a fourthenergy company, Solid Energy, appears unlikely after that company ran intofinancial difficulties. The government has also said it may reduce its 73percent stake in national carrier Air New Zealand.