* NZ govt to sell minority Genesis Energy stake late March
* Genesis listing expected in April
* NZ govt may sell fewer shares to ramp up price
* Genesis sale will be last government asset sale
(Adds detail, quotes, background)
WELLINGTON, Feb 26 The New Zealand government
said on Wednesday it will sell up to 49 percent of power company
Genesis Energy Ltd in late March, wrapping up a NZ$5
billion ($4.2 billion) asset sale programme to cut government
borrowing and pay down debt.
The sale of a minority stake in Genesis, which has been
valued at up to NZ$2.1 billion in total, would be carried out by
a front-end bookbuild, where the price is settled at the start
of the sale process, Finance Minister Bill English said.
The size of the Genesis stake to be sold had yet to be
decided, but it might be between 30 and 49 percent, smaller than
previous sales, in an effort to improve the price, he told a
The New Zealand government has already sold 49 percent
stakes in power companies Mighty River Power Ltd and
Meridian Energy Ltd, and cut its stake in Air New
Zealand Ltd to 54 percent, raising NZ$3.93 billion.
English said New Zealand sharebrokers would bid for shares
in Genesis at the same time as institutions, in a change from
previous asset sales, to improve competition in the bookbuild.
The sale would include a loyalty bonus scheme to encourage
local investors to buy and hold the shares, as with the Mighty
River Power sale.
Genesis, which relies mainly on gas and coal fired stations,
has about a quarter of the country's retail electricity market.
It reported a 72 percent fall in first-half profit this week due
to higher costs and tough market conditions.
Analysts have said the relatively poor performance of Mighty
River Power Ltd and Meridian Energy Ltd
since they listed, along with an abundance of other energy
companies on the New Zealand share market, means Genesis will
have to be priced lower to attract investors.
The government has scaled back the forecast proceeds from
asset sales to NZ$4.6 billion to NZ$5 billion from an original
estimate of NZ$5 billion to NZ$7 billion, after removing
financially troubled coal miner Solid Energy from the process.
It has forecast a return to a small budget surplus next
year, aided by the asset sales.
English said the New Zealand economy was showing broad-based
growth and higher interest rates were inevitable as a result,
but the government would keep a tight control on spending and
return to surplus to limit rate rises.
The Reserve Bank of New Zealand is expected to start raising
rates from a record low at next month's monetary statement,
making it the first in a developed economy to start tightening
($1 = 1.2000 New Zealand Dollars)
(Reporting by Gyles Beckford; Editing by Richard Pullin)