Reuters logo
UPDATE 1-New Zealand's Mighty River IPO raises record $1.4 bln
May 8, 2013 / 9:01 AM / 5 years ago

UPDATE 1-New Zealand's Mighty River IPO raises record $1.4 bln

* Shares priced at NZ$2.50 vs NZ$2.35-NZ$2.80 range

* Govt eyeing up to NZ$7 bln from asset sale programme

* Mighty River lists on New Zealand Stock Exchange on Friday

* Third-biggest IPO in Asia Pacific this year (Recasts, adds detail, background)

WELLINGTON, May 8 (Reuters) - New Zealand raised a record NZ$1.7 billion ($1.4 billion) from the sale of a minority stake in power company Mighty River Power Ltd on Wednesday, kicking off a major state asset sale programme with Asia’s third-largest initial public offering this year.

Mighty River is the first among three power companies, a coal miner, and an airline in which the New Zealand government wants to sell minority stakes to raise up to NZ$7 billion over the next three to five years to repay debt and get back into surplus.

The final price of NZ$2.50 per share was set after a book building process with institutional investors. An initial price range of NZ$2.35 to NZ$2.80 had been indicated when the offer was opened.

“The share offer will raise NZ$1.7 billion, which is a very good return for New Zealand taxpayers. Those proceeds will go into the Future Investment Fund, allowing the Government to control debt while continuing to invest in public assets,” Finance Minister Bill English.

The deal tops the previous biggest IPO in New Zealand, the 1999 sale of a 60 percent share of Contact Energy, which raised NZ$1.1 billion.

The New Zealand government sold 686 million shares in Mighty River, a 49 percent stake, to retail and institutional investors. The company will debut on the New Zealand Stock Exchange on May 10.

The benchmark NZX 50 Index has been on a powerful run, gaining 13.5 percent so far this year and notching a record closing high on Wednesday.

Mighty River, which has nine hydro, five geothermal, and one gas-fired station, produces just under a fifth of the country’s power and has 390,000 retail customers.

Some 440,000 New Zealanders - one in 10 - had registered their interest but only around 113,000 ended up buying shares.

An initial surge in interest for the offering had been tempered by the risk of a power glut caused by the possible closing of an aluminium smelter swamping prices in the future, and a proposal by the opposition Labour and Green parties to regulate power prices if they should form a government after next year’s election.

The IPO ranks as the third largest in Asia Pacific so far in 2013, behind the listings by BTS Rail Mass Transit Growth Infrastructure Fund and Mapletree Greater China Commercial Trust that raised about $2 billion each.

The government has said it wants to sell a similar 49 percent stake in either Genesis Energy or Meridian Energy before the end of the year.

First NZ Capital/Credit Suisse, Goldman Sachs and Macquarie Securities were the lead managers on the Mighty River sale. (Reporting by Gyles Beckford; Additional reporting by Lincoln Feast in Sydney and Elzio Barreto in Hong Kong; Editing by Chris Gallagher)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below