Somehow, National managed to spend $66 million on selling Mighty River Power. That’s twice what they promised it would cost. For comparison, it’s the same amount as it costs to put 750 kids through school, all the way from Year 1 to 13 – and National wasted it on brokers and middlemen.
The Greens (who showed the that sale cost $66m) have done the numbers on Mighty River’s profit announcement to work out the Crown would have a net $2.3 million more per week if it hadn’t sold the shares. That ongoing, permanent loss is enough to pay for the education of 18,000 kids.
Let’s say it again: National spent $66 million on selling Mighty River and are now adding $2.3 million a week more to that cost. Today, 15 weeks after the sale, the total cost of selling Mighty River stands at $102 million. By the end of the year, it will be $143 million. By the election, it will be quarter of a billion dollars.
National was cock-a-hoop about the $1,686 million it got for selling the shares. Well, it’s eroding pretty bloody fast, isn’t it? And once it’s gone, the cost of foregone net profits will just keep on building up. That’s what happens when you sell a highly profitable asset to avoid low interest debt. Like Russel Norman says “so much for the supposed business acumen of the National Party”.
(and, yes, that $2.3 million a week figure is net of the borrowing costs that would otherwise have been incurred)