Successful Float Of Capital Properties NZ

  • Tony Ryall
State Owned Enterprises

The Government float of Capital Properties New Zealand has been successfully completed with strong and over-subscribed demand for shares from the New Zealand public, the Treasurer and Minister of Finance Rt Hon Bill Birch and State Owned Enterprises Minister Hon Tony Ryall said today.

"Over 31,000 New Zealanders have purchased shares in Capital Properties New Zealand ­ more than 11,000 of them new investors on the sharemarket," the Ministers said.

"Taken with the successful float of Auckland International Airport, this brings to 100,000 the number of New Zealand investors in Government floats -- 60,000 of them first-time investors on the sharemarket.

"Capital Properties New Zealand will be 97% New Zealand-owned. The vast majority of shares -- 86% -- has been sold to small investors through the public pool and sharebrokers. It will have the largest number of investors of any New Zealand property company and will have more New Zealand shareholders than Telecom.

"This Government has taken a new approach to asset sales. Our aim has been to encourage wide-spread public ownership by offering shares in Government businesses to ordinary New Zealanders.

"The public has given an emphatic 'thumbs up' to the opportunity to purchase shares -- almost 100,000 investors have received shares in the Government's first two share floats.

"The Government has undertaken this float with the clear, stated commitment that we would endeavour to ensure that all New Zealanders who made a valid application through the public pool would receive an allocation of shares.

"Public demand for shares has been strong and over-subscribed, making scaling back of public pool applications necessary. Every valid application into the public pool will receive an allocation of 1,000 shares. It has not been possible to accept multiple applications.

"The float has been structured so that investors pay for their shares in two instalments. The first instalment of 50 cents per share was payable on application.

"After a competitive tender process, the price for the second instalment, due on 30 June 2000, has been set at 57 cents. However, public investors who have been allocated shares under the public offer and hold those shares until the final instalment payment will pay only 50 cents per share for the final instalment. The 'loyalty' price applies only to public investors who are allocated shares under the public offer.

"The Government will receive $60 million for the first instalment and at least $62-$64 million for the second. The final value to the Crown of the second instalment will depend on the number of public investors who sell their shares prior to 30 June 2000. New purchasers are not covered by the 'loyalty' price and will pay 57 cents, not 50 cents, to the Government for the second instalment.

"The Government will use the returns from both instalments to pay back debt, freeing up funds to invest in priority areas such as health and education."

Investors will be sent information in the next few days as to the shares they have been allocated. Refunds for shares not allocated will be mailed by Friday.

The sale of the Government's 119 million shares in Capital Properties New Zealand opened on 27 October. The offer closed to the public on 18 November and to institutions on 20 November.

Shares in Capital Properties New Zealand will begin trading on the NZSE at 9.30am, Friday 27 November.