New Zealand unveils more of privatisation plan

New Zealand unveils more of privatisation plan
New Zealand Prime Minister John Key.

WELLINGTON - New Zealand will partially privatise its largest electricity generator in early November as part of the government's plan to balance the books by 2014-15, Prime Minister John Key said Tuesday.

Key said the government would float 49 per cent of Meridian Energy and retain a majority 51 per cent, similar to its sale of Mighty River Power, which poured NZ$1.7 billion (S$1.73 billion) into Treasury coffers when it was partially listed in May.

Key, whose conservative administration has committed to achieving a budget surplus in the 2014-15 financial year, said the Mighty River sale had been a success and he expected the same with Meridian.

"(They) benefit from a broader shareholder base, and end up being better, stronger companies for the rigour and transparency that being listed on the share market brings," he said.

The government's long-term plan, announced two years ago, is to raise NZ$5 -7 billion by selling 49 per cent stakes in Mighty River, Meridian and Genesis Energy , while also reducing its holding in flag carrier Air New Zealand from 76 to 51 per cent.

State-owned coal producer Solid Energy was also part of the initial sale plan but has been withdrawn as it struggles to cope with weak global prices. Key said that after November's Meridian float, Genesis would follow early next year.

"While it would have been technically possible to fit a partial sale of Genesis into the share offer programme this year, that's not something we will be pursing in 2013," he said.

He did not specify how much the government expected to raise from selling the Meridian stake, although the entire company has reportedly been valued at around NZ$6.5 billion.

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