web analytics
The Standard
Advertising

Government in trouble over Meridian Float

Written By: - Date published: 8:33 pm, October 23rd, 2013 - 34 comments
Categories: bill english, john key, Privatisation, same old national - Tags:

emerson-privatisation

The results of the Meridian share float have been announced and they pose a whole lot of problems for the Government.

Meridian is a company which was valued at $6 billion in 2011.  The sale of 49% of its shares at $1.50, at the low end of estimates, gives the company a market value of $3.84 billion.

The Government thought that it would have 250,000 mum and dad investors in each of the planned floats.  Mighty River Power had 116,000 and Meridian is down to 62,000.

And 13% of its shares will be owned by overseas interests, not Kiwi mum and dad investors.  And they will be financed into the transaction.

As a sign of how bad things are Bill English was sent out to make the announcement.  John Key was no where to be seen.

If you ever needed to be persuaded that selling what are long term strategically vital assets for peanuts is a bad idea then this should provide it.

Update:

Thanks Pascal’s bookie for this comment from local mike:

“Cosgrove’s statement here:

http://www.voxy.co.nz/politics/meridian-sale-failure-cosgrove/5/171716?utm_source=twitterfeed&utm_medium=twitter

“I don’t know how John Key and Bill English can look the taxpayers of New Zealand in the face. They have they sold half of a valuable long term asset for $1.2 billion less than they told the public they would sell it for in 2011. And just 62,000 retail investors, including institutions, bought shares.

“John Key and Bill English threw everything they could at making this sale a success, even offering a Suzanne Paul-style buy now – pay later scheme. Despite offering everything but a free set of steak knives just 62,000 people wanted to buy in.

“The number of investors in Meridian is half that of Mighty River, which was half that of Contact Energy when the National Government sold it in 1999. At this rate of success they will be paying people to buy Genesis Energy shares.

Greens here:

http://www.voxy.co.nz/politics/meridian-another-failure-national%E2%80%99s-asset-sales-greens/5/171717?utm_source=twitterfeed&utm_medium=twitter

Only 62,000 retail shareholders have bought shares in Meridian Energy. That compares to 113,000 who bought shares in Mighty River Power and an expected take-up of 250,000 buyers per sale when the asset sales were being planned. 62,000 equates to just 1.4% of the New Zealand population.

Buyers will reap the benefit of paying only $1 per share up front and the remaining 50 cents in 18 months’ time – the total cost to the Crown of these interest free loans will be $50 million. Overseas investors bought 28% of the shares sold (13.5% of the company), meaning the New Zealand taxpayer is paying $14 million to incentivise foreign institutions to buy our electricity company.

“The Meridian flop confirms that National’s asset sales are a failure and a huge waste money,” said Dr Norman.

“Only 1% of Kiwis bought shares in Meridian. The other 99% of us have lost the profits from a strategic asset and can now look forward to higher power prices.

“The Meridian sale cost around $90 million. We know the ‘buy now, pay later’ scheme alone will set taxpayers back $50 million while the fees for brokers, lawyers, and ad-men will add around $40 million to the bill. That’s on top of the $173 million that National’s asset sales have already cost the taxpayer.

“Mr Key has just cost the New Zealand taxpayer $14 million to subsidise overseas buyers as they swoop in to take a chunk of Meridian and its profits.”

34 comments on “Government in trouble over Meridian Float”

  1. Bunji 1

    In 2011 they said that the sales would raise as much as $10 billion – now they’re not going to get anywhere near half that.

    Even if you agreed with the principle of selling off important strategic assets; even if the fact that they have a higher rate of return that the govt cost of borrowing didn’t turn your head; the sheer incompetence of giving away these assets for so little to so few people – the 1.4% – should surely make you wonder about this government’s desperation to sell when they can’t get a decent price.

    • Bunji 1.1

      This is a MAJOR hole in National’s books. They’re relying on this to be the bulk of their “$5-$7 billion” guesstimate that they’re running our economy on.
      So Mighty River $1.7 billion, Meridian $1.88 billion, they can get $300 million for Air NZ if they don’t release the shares all in one go and flood the market (although given their current form…), plus what for Genesis? $600 million topside? But the number of investors available is diminishing, and the appetite for energy companies further ruining the balance of your share portfolio is diminishing…

      There’s no chance they’re going to get more than $4.5 billion total out of these sales.

      We’ve been ripped off as owners of these assets. We didn’t want to sell, and our agents have got us an horrendous price.

      • mickysavage 1.1.1

        Yep the next question is could the Government cancel the float after seeing the offers (which I am sure they could do) and if so then why didn’t they do it?

        They are selling strategically vital assets for peanuts.

        • Draco T Bastard 1.1.1.1

          They’re selling them on ideology (their belief that rich people should own everything as was true under feudalism) and because of that there’s no way that they would stop the sales.

          • thatguynz 1.1.1.1.1

            Or is it more that those that they truly represent told them to?

            • Tigger 1.1.1.1.1.1

              They have to sell them. This has been Key’s plan ever since those Hollow Man days when he was installed to turn National into NACTional.

  2. Lanthanide 2

    There was an apparently baseless story on stuff a few days ago saying that the offer was likely to be oversubscribed and allocations would be scaled back from what was requested. A few days before that there was a story about how the price would be towards the upper end of the $1.50-1.80 range.

  3. Pascal's bookie 3

    Norman’s final zinger in that release is a pretty funny:

    “It’s hard to do a belly flop while simultaneously giving 99% of New Zealanders the fingers, but John Key has shown that it is possible”

    And Key can’t really take a shot back coz his MOM sux and he’ll look like a fool. Just has to take it.

  4. appleboy 4

    What a bunch of crooks. This is a total failure and should be screamed out loud by Labour and the Greens at every opportunity until the next election where kiwis hopefully will have seen this bunch of wankers for the lying thieving scum they are, and vote them out.

    • Anne 4.1

      There’s one word to sum it up from start to finish, and from the top of the political tree to the bottom – 3 times for impact:

      GREED… GREED… GREED.

      • Draco T Bastard 4.1.1

        That and control because once all the commons is sold off to the rich everyone else will have to do what they say.

  5. newsense 5

    What does Key care?

    He’s about done his dash surely, sent most of the things that he was able to tits up, transferred as much wealth and privilege as possible and now, especially if the polls get much worse, is about to swan off to Hawaii before some diplomatic post in Hollywood leaving the rest of the Nats to the fighting and the mess behind him…

    • Mike S 5.1

      Yep, and I’m sure his ‘blind’ trust will have snapped up plenty of shares, I can picture him sitting in a corner snorting and sniveling and rubbing his hands in glee..

  6. bad12 6

    A convenient announcement from National on a Wednesday night knowing that Slippery the Prime Minister wont be in the House tomorrow to answer any questions,

    Are these people really attached to planet earth by anything other than an over-supply of weighty excrement which stops them all floating off someplace else,

    Trying to micro-manage this FLOP of a sale of what we all already own as far as the bad news goes for National is going to look something like lighting a match in an Australian bushfire, probably not what would be seen as the brightest of ideas but will anyone notice as the fucking lot of them are incinerated by the roaring public wrath that will be the inevitable consequences of what is in essence the final dance at the ball of the village idiots,

    If anyone doubted it, think again, this will finish National and as the roaring for blood escalates watch those bastards tear each other apart like a pack of rabid dogs….

  7. Colonial Viper 7

    We’re selling valuable strategic energy assets in exchange for currency which is generated out of thin air by the billions via a few computer key strokes.

    Have a think about how wrong that is.

  8. Steve 8

    This is a cock up of epic proportions and I wonder how many Meridian prospectuses they printed? No doubt there will be an OIA request being filed on that one.
    I really don’t think Key could bear the thought of making a concession speech at the next election. If the polls continue to show National’s slide I expect him to cut loose early next year pushing aside women and children as he scrambles for the exit.

  9. Lionel 9

    Key is corrupt he will bail for sure don’t put it past the piece of s#*# to try and organise a knighthood for himself watched him in the house today as Meterei Turei tried to nail him down would’nt answer questions and resorted to smart arse answers which included a insincere retraction and apology asked from by the speaker who was reluctant to stick that on him
    he’s hardly partial is David Carter

  10. ScottGN 10

    Bill English is blaming the low interest and low price for the the shares on the Labour and Green power policy. So he’s basically saying that investors were scared off because they have factored in a likely change of government next year? Great news Bill!

  11. phil 11

    The good news is that there has been a huge transfer of wealth here, speeding up the downfall of a desperate and traitorous government. If Labour, in Govt, had the smarts they should freeze the price and renationalize the electricity sector. Where is Max Bradford, and his tory mates began this festering mess. How do you put Humpty Dumpty back together again? You hatch a new egg.

  12. Tracey 12

    Where are all the folks lauding mr keys trading skills and nouse?

  13. Ant 13

    So what’s going to give now so Key/English can make their feel good election year surplus? Interest free student loans?

  14. Crunchtime 14

    Those numbers are especially damning… There’s been a lot of talk of the 1% who control most of the resources of the world. Here in NZ we have the 1% who own shares in our power company. The other 99% are less than impressed.

  15. blue leopard (Get Lost GCSB Bill) 15

    Compare the numbers in this article to the approx 51% of voters (or by my rough calculations: 1, 139,901 people) who voted for parties that opposed asset sales and one can see another good reason for politicians to listen to what the electorate tells them.

    http://www.electionresults.govt.nz/electionresults_2011/partystatus.html

    What an incompetent government we have.

  16. Steve Bradley 16

    Steven Joyce is describing members of Parliament who oppose the government’s policy on asset sales as ‘communists’ and their actions as ‘sabotage’. This is extreme language – trying to demonise another group of loyal dissidents. I feel sorry for S. Joyce and I am worried about his physical health: up close he doesn’t look well, distinctly seedy even. Perhaps he needs an extended vacation.

    Now, the extremity of his language raises concerns about his mental health. ‘Sabotage’ is a capital crime and once was punished by hanging, or at least 14 years transportation to Sydney Town. This is a serious allegation to make – trying a cunning twist to turn a policy dispute into a crime against the State. We’ve heard all this before in the Twentieth Century from leaders with no sense of democratic accountability.

    The National government is quite happy to loot the patrimony of Aotearoa but extremely reluctant to use the power of the state to help the struggling residents of this state.

    Labour’s promises to workers about the minimum and living wages is chundered on by Joyce saying on TV, “you can’t raise wages by fiat.” Of course you can. You just need a simple majority in Parliament. Roll on the General Election.

    • Tat Loo 16.1

      Labour’s promises to workers about the minimum and living wages is chundered on by Joyce saying on TV, “you can’t raise wages by fiat.” Of course you can. You just need a simple majority in Parliament.

      Apparently the Remuneration Authority is going to raise the wages of Parliamentarians by fiat.

      Joyce doesn’t seem to have any problem with that, though.

  17. tricledrown 17

    Phil the new egg could be just building a few more wind farms to put downward pressure on clean energy .
    Cheaper than buying back.

Important links

Recent Comments

Recent Posts

1 2 3 7

  • Time for NZ to prohibit the killing of great apes
    That ban was widely hailed, and spurred efforts in other countries to get similar bans. However, apes are still being exploited, abused and killed, both in captivity and in the wild. Examples of cruelty, neglect and abuse abound. Apes are… ...
    GreensBy Mojo Mathers MP
    22 hours ago
  • Auckland building consents: Tragic
    The only word to describe the latest building consent figures for Auckland is ‘tragic’, Labour’s Housing spokesperson Phil Twyford says. “Whatever the Government is doing to address the Auckland housing crisis, it is clearly not working. ...
    23 hours ago
  • A whiff of a new biosecurity scandal?
    A pest which could create havoc for New Zealand’s horticulture and agriculture sector must be as much a focus for the Government as hunting out fruit flies, Labour’s Biosecurity spokesperson Damien O’Connor says. “While the Ministry for Primary Industries is… ...
    1 day ago
  • Government shrugs off health sector crisis
    Despite new evidence showing that cuts to health spending are costing lives the Government continues to deny the sector is struggling, Labour’s Health spokesperson Annette King says. “Health services in New Zealand are in crisis. ...
    2 days ago
  • Parata lowered the bar for failing charter school
    When Hekia Parata became aware that the Whangaruru charter school was experiencing major problems her first action was to drop standards by reducing the number of qualified teachers they had to employ, Labour’s Education spokesperson Chris Hipkins has revealed. “Hekia… ...
    2 days ago
  • National not being straight about the economy
    John Key and Bill English need to be straight with New Zealanders about the damage their failure to diversify the economy is doing, after new figures show export growth plunged due to a collapse in dairy exports, says Grant Robertson.… ...
    2 days ago
  • Mind the Gap
    This week the International Monetary Fund released a report on the wider economic value in closing the gender pay gap. When even the bastions of free-market economics start to raise concerns about gender pay gaps, we have to realise how… ...
    GreensBy Jan Logie MP
    2 days ago
  • Labour will hold National to parental leave promise
    Labour will hold National to its promise to increase the support given to new parents of premature, multiple birth and babies born with disabilities, Labour’s paid parental leave campaigner Sue Moroney says. "I am naturally disappointed that after battling for… ...
    3 days ago
  • It was all just pillar talk
    Steven Joyce’s confession that he can no longer guarantee a pillar-free design for the New Zealand International Convention Centre shows the Government has abandoned its dream of creating an ‘iconic’ ‘world-class’ structure, says Labour Economic Development spokesperson David Clark. “Steven… ...
    3 days ago
  • Australians move on offshore speculators
    John Key might want to have a quiet word with Australian Prime Minister Tony Abbott about Canberra's just-announced crack down on offshore speculators when he visits New Zealand this week, Labour's Housing spokesperson Phil Twyford says."Tony Abbott's centre right government… ...
    3 days ago
  • Government at odds on overseas driver crashes
    National backbencher Jacqui Dean has spoken out about overseas driver crashes, putting herself at odds with Prime Minister John Key who is on record as saying it’s not a big issue, Labour’s Transport spokesperson Phil Twyford says. “I’m not surprised… ...
    3 days ago
  • Human Rights and the Palestine Crisis
    Last week I heard two Palestinians speak at Wellington events about the ongoing crisis in their country. Samar Sabawi spoke to a full house about the history of Palestine and gave us a lucid and disturbing account of the situation… ...
    GreensBy Catherine Delahunty MP
    3 days ago
  • Time to take real care of our kids
    An Amnesty International report has once again criticised New Zealand’s track record on looking after our kids, Labour’s Children’s spokesperson Jacinda Ardern says. The annual report, which looks at global human rights abuses highlights not only the fact that high… ...
    3 days ago
  • John Key wrong about Labour’s war vote
    John Key’s desperate claims that the former Labour Government didn’t put combat troop deployment to a Parliamentary vote are simply wrong, Labour’s Defence spokesperson Phil Goff says. “It was disgraceful that the Prime Minister ran rough shod over democracy and… ...
    3 days ago
  • Māori language bill needs work
     It is clear that the first draft of the Māori Language Bill was about structures and funding rather than the survival of te reo Māori, Labour’s Māori Development Spokesperson Nanaia Mahuta says.  “Labour is pleased that the Minister of Māori… ...
    3 days ago
  • Report proves troubled school shouldn’t have opened
    The long-awaited release of an Education Review Office report into Northland’s troubled Whangaruru charter school proves it should never have been approved in the first place, Labour’s Education spokesperson Chris Hipkins says. “This report identifies problems with absenteeism and disengaged… ...
    4 days ago
  • Reply to PM’s statement on deploying troops to Iraq
    “The decision of any Government to send troops to a conflict zone is a very serious one, and it is right that this House takes time to consider it, to debate it, and, ideally, to vote on it, but we… ...
    4 days ago
  • Minister must take action on death trap slides
    Workplace Relations Safety Minister Michael Woodhouse must take urgent action to ensure inflatable amusement rides don’t become death traps for children, Labour’s spokesperson on Labour Relations Iain Lees-Galloway says. “No one wants to stop kids having fun, but horror stories… ...
    4 days ago
  • Manus Island and the New Zealand Government
    This week the Greens have participated in awareness activity about Manus Island, the refugee camp on an island in Papua New Guinea where Australia dumps asylum seekers. John Key says that he has every confidence in the Australian Government’s claim… ...
    GreensBy Catherine Delahunty MP
    1 week ago
  • Election Inquiry – Getting accessible voting on the agenda
    James Shaw has been doing a series of blogs on the Election Inquiry into last year’s general election.  I thought this was a great opportunity to raise an issue very dear to me – accessible voting. Last year’s general election… ...
    GreensBy Mojo Mathers MP
    1 week ago
  • RMA changes no solution to Christchurch housing
    Housing will continue to be a big issue in 2015. The latest Consumer Price Index, released last month, shows both good news and bad news on the housing front. After years of being the most expensive place to build a… ...
    GreensBy Eugenie Sage MP
    1 week ago
  • Saving kokako in South Auckland’s Hunua Ranges
    It is amazing that you can hear the song of the endangered North Island kokako in South Auckland’s Hunua Ranges, less than 50 kms from the central city. A heavy schedule of policy workshops at the Green Party’s Policy… ...
    GreensBy Eugenie Sage MP
    2 weeks ago
  • Let’s not turn a blind eye to human rights
    The Cricket World Cup has just opened in New Zealand, and it’s an opportunity for us to shine on the world stage. International sport can be a chance for us to build relationships with other countries, and examine what it… ...
    GreensBy Catherine Delahunty MP
    2 weeks ago
  • Its Just Not Cricket
    This week it was my privilege to work with Sri Lankan Tamil communities in this country and host Australian journalist and human rights advocate Trevor Grant. I knew a bit about Trevor from his biography but I didn’t know just… ...
    GreensBy Catherine Delahunty MP
    2 weeks ago
  • Time for NZ to #BeCrueltyFree
    The Government is about to progress the final stages of the Animal Welfare Amendment bill. This will be our last opportunity to get changes made to improve the bill to ensure a better outcome for animals. I have put forwards… ...
    GreensBy Mojo Mathers MP
    2 weeks ago
  • We want access!
    Access to buildings is a big issue for many New Zealanders. It looks like that, due to the hard work and persistence of people in the disability community, the Government may finally be starting to take access to buildings seriously.… ...
    GreensBy Mojo Mathers MP
    2 weeks ago
  • Greens call on Super Fund to divest from fossil fuels
    The Green Party today called on the New Zealand Superannuation Fund (the Fund) to divest from fossil fuels, starting immediately with coal. The call was accompanied with a new report, Making money from a climate catastrophe: The case for divesting… ...
    GreensBy Russel Norman MP
    2 weeks ago
  • Young Kiwis’ housing crisis
    Shelter is a fundamental human need along with food, water and clean air. All humans need adequate shelter; it’s a human right. Warm, safe, stable accommodation is critical for young people to be able learn and grow and just be.… ...
    GreensBy Jan Logie MP
    2 weeks ago
  • On the River Patrol in Te Tai Tokerau
    Last Wednesday, I went on a tour of some of Northland’s rivers with  Millan Ruka from Environmental River Patrol as he monitored water quality throughout Te Tai Tokerau. The dry conditions meant we couldn’t use the boat but we visited… ...
    GreensBy Catherine Delahunty MP
    2 weeks ago
  • Opening of Parliament 2015
    Russel NormanOpening of Parliament Speech February 2015 Tēnā koutou Tēnā koutou Tēnā koutou katoa. A brief history of climate change What a summer! It's been hot, even here in Wellington, hotter than any summer I can remember. All… ...
    GreensBy Russel Norman MP
    3 weeks ago

  • Ex-Hostage Returning to Iraq amid Current Crisis
    AUCKLAND, NEW ZEALAND – Harmeet Singh Sooden is travelling to Iraq in the coming weeks to work with Christian Peacemaker Teams (CPT) on a short-term assignment. He will join a CPT project that is supporting local bodies managing the humanitarian… ...
    18 mins ago
  • Rally against TPPA in Hastings
    With the final negotiations of the Trans Pacific Partnership Agreement (TPPA) expected to be taking place in March, and with widespread community concern about threats this secret deal poses to New Zealand’s sovereignty, a rally is being held onSaturday, ...
    1 hour ago
  • Local government debate is far from over
    Regional business surveys shows local government debate is far from over Regional business surveys conducted in advance of submissions closing on the Local Government Commission’s draft proposal show that the debate on the right model for Wellington ...
    1 hour ago
  • Crocodile Tears From Members of Parliament
    Despite public comments bemoaning yesterday’s back-dated pay hike, not a single member of Parliament intends to reject their pay rise, according to responses received by the Taxpayers’ Union . This morning the Union emailed every MP asking whether ...
    2 hours ago
  • Politicians’ pay increases
    “An increase of 3.5% in the minimum wage compared with 5.5% increase for politicians is appalling. It is another example of the wealthy looking after themselves and showing no regard for the poor” says Peter Malcolm, National Secretary of Income… ...
    19 hours ago
  • Invade Mexico for Guacamole Reserves Instead
    #WagePeaceNZ, founded yesterday, along with all 7 of its Twitter followers, demands that New Zealand invade Mexico for its Guacamole reserves in lieu of sending 143 troops to Iraq. ...
    19 hours ago
  • Australian Prime Minister to thank New Zealand fire crews
    The contribution of more than 400 New Zealand firefighters in helping battle bushfires across the Tasman over the past 14 years will be acknowledged tomorrow during a visit by Australian Prime Minister Tony Abbott to an Auckland fire station. ...
    19 hours ago
  • A simple question for Winston Peters: Where do you live?
    "Winston Peters has set a new record, being economical with the truth only hours into his campaign," claims Northland ACT candidate Robin Grieve. ...
    19 hours ago
  • Northland doesn’t need yesterday’s man
    "It's great that Winston Peters is finally taking an interest in Northland. But frankly we don’t need yesterday’s ideas from yesterday’s men in our region," ACT Northland candidate Robin Grieve said today. ...
    20 hours ago
  • Children’s Day – 365 days a year
    Barnardos wants New Zealanders to celebrate Children’s Day on 1 March, and to recognise the effort it takes to raise great kids over all 365 days of the year. ...
    21 hours ago
  • Will MPs Put Taxpayers’ Money Where Their Mouth is?
    The Taxpayers’ Union is calling the bluff of MPs and has written to each one asking whether they will be accepting the backdated pay increases announced yesterday. Taxpayers’ Union Executive Director, Jordan Williams, says: ...
    23 hours ago
  • Fonterra Sneaks Round The Corner
    Fonterra’s subsidiary Glencoal has put its plans for an open cast mine on SH2 at Mangatangi on hold indefinitely. The local community is celebrating. They worked very hard with submissions on all the impacts of coal mining that you are… ...
    23 hours ago
  • How Free Is Free Speech?
    How Free Is Free Speech: Do we recommend unconstrained freedom of expression? The Chief Human Rights Commissioner, David Rutherford, will be In Conversation with Noel Cheer at St Andrew’s on The Terrace, Wellington on Tuesday 3 March 2015 from 12:15pm… ...
    23 hours ago
  • No military deployment in Iraq: Nationwide peace vigils
    Peace vigils calling for increased humanitarian assistance and diplomatic support for Middle East peace processes, and opposing the military deployment to Iraq, will be held around the country at 5pm on Thursday, 5 March, coordinated by Peace Movement ...
    1 day ago
  • Message of Nationwide Day of Action :‘TPPA? No Deal!’
    “An amazing 22 towns and cities across New Zealand have rallied to the call for a nationwide day of action against the Trans-Pacific Partnership Agreement (TPPA) on 7 March”, according to Chantelle Campbell who is coordinating the national events ...
    1 day ago

Removed at the request of The Daily Blog.
Public service advertisements by The Standard

Current CO2 level in the atmosphere