New Zealanders considering investing in Meridian Energy can now check out the offer document to help them decide whether to buy into the country’s largest electricity generator.
The offer opens to New Zealanders on 30 September and closes on 18 October, with up to 49 per cent of the company expected to be listed on the sharemarket on 29 October.
Kiwi investors will pay for their shares in two instalments. The first instalment will be $1 a share, payable when investors apply. The second instalment will cost no more than 60 cents a share, and be paid 18 months later.
During that 18 month instalment period, investors receive any dividends in full, despite having only part-paid for their shares. This provides a higher dividend yield during that instalment period.
The Meridian offer – the second in the Government’s share offer programme – comes after the successful float of 49 per cent of Mighty River Power earlier this year. The Mighty River Power offer achieved our target of 85 to 90 per cent New Zealand shareholding, and retained majority Government control. We are confident we will do the same with Meridian.
The compelling reasons for proceeding with the share offers are as valid today as they were when we put them to the voters two years ago.
First, we can invest the proceeds in other public assets such as modern schools and hospitals without having to borrow that money in volatile overseas markets. The Mighty River Power offer raised $1.7 billion for our Future Investment Fund, with $426 million already earmarked for the redevelopment of Christchurch hospitals.
It makes sense to reorganise government’s assets and redeploy capital to priority areas without having to borrow more and increase debt.
Second, under the share offer programme New Zealanders get an opportunity to invest in big Kiwi companies at a time when they are telling us they want to diversify their growing savings away from property, bank deposits, and finance companies. New Zealanders have around about $120 billion in bank deposits and $15 billion in KiwiSaver accounts.
And, third, it’s good for the companies themselves. Greater transparency and oversight from public ownership will further focus the companies on ensuring their businesses are run effectively and efficiently, and the companies won’t have to depend entirely on a cash-strapped Government for new capital to grow.
New Zealanders can find out all they need to know about the Meridian offer at www.meridianshares.govt.nz, or call 0800 90 30 90 to receive a hard copy of the offer document.