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John Key

15 October, 2012

PM announces next steps for Mighty River sale

Prime Minister John Key today outlined the Government’s next steps to prepare Mighty River Power for its partial sale in the first half of 2013.

“I’m pleased to announce today Cabinet made three decisions regarding our shares sales programme:

“First, the Government will not implement the Waitangi Tribunal’s ‘shares plus’ concept, or engage in further negotiations in relation to that concept, before the sale of shares in our energy companies.

“Second, the Government will proceed to remove Mighty River Power from the State Owned Enterprises Act. We will prepare an Order in Council for Cabinet and Executive Council to consider and approve on Tuesday 23 October.

“And finally, we will direct officials to continue to work towards a sale of up to 49 per cent of the shares in Mighty River Power between March and June 2013.”

The decision comes after the conclusion of consultation on ‘shares plus’ with Māori with direct interests in the water and geothermal resources used by Mighty River Power, and Meridian and Genesis.

Mr Key says the series of hui on ‘shares plus’ was part of the Government’s commitment to consult with Māori in good faith.

“From the series of the hui, and the written submissions the Government received, it is clear Māori claim a wide range of rights and interests in water.”

Mr Key says the Government’s position on water has always been very clear:

  • In common law no one owns water.
  • Maori do have rights and interests in water, and these will continue to be addressed through a range of processes such as Treaty settlements, the Government’s Fresh Start for Fresh Water programme and dialogue with iwi leaders.
  • The partial sale of Mighty River Power does not impact on the Crown’s ability to recognise Maori rights and interests in water.

“Following analysis of the oral submissions made at hui, along with the written submissions, the Government’s view is that no new information has come to light to change our preliminary view – which is, that the concept of ‘shares plus’ should not be progressed,” says Mr Key.

The key findings from the consultation on ‘shares plus’ show:

  • Financial redress and input into resource management decisions can be provided in other – and in some cases better – ways.
  • Appointing directors and exercising shareholder voting rights can also be achieved in other ways with the Crown, which will remain the controlling shareholder.
  • The Crown does not believe that providing iwi with special rights in making management decisions will work well and most submitters who considered the idea agreed.
  • ‘Shares plus’ would create a potential conflict of interest within and between different iwi groups. And it would potentially weaken existing relationships between iwi groups and the SOEs.

Mr Key says the decisions announced today may lead to legal action from the Māori Council and others.

“That’s entirely a matter for them. From the Government’s perspective, it would not be unexpected.

“I’m confident the decisions we have outlined today will provide further certainty about our share offer programme. They also reaffirm our commitment to offer a minority shareholding in Mighty River Power during the second quarter of 2013, subject to market conditions.

“In terms of next steps, early in the new year Mighty River Power will prepare its half year financial statements for the six month period to 31 December 2012. These statements will be audited and will take about two months after balance date to complete.

“As the Government has previously said, before the offer period commences, New Zealanders will be able to register their interest in purchasing shares.

“Expressing interest is not a commitment to buy shares and no money will be sought, but it is one way in which New Zealanders will be put at the front of the queue for shares,” says Mr Key.
 

Pre-Prospectus Disclaimer

The Crown is considering offering shares to the public in one or more of Genesis Power Limited, Meridian Energy Limited, Mighty River Power Limited, Solid Energy New Zealand Limited and Air New Zealand Limited. No money is currently being sought and no applications for shares will be accepted or money received until after an investment statement containing information about the relevant offer of shares is available.