Media Briefing On Contact Priority RegistrationState Owned Enterprises
When you have a large public float to manage, then the business of printing the right number of Investment Statements, mailing them out, and getting replies back in can be a pain in the neck for everyone. Priority Registration gives potential investors the opportunity to put their names down in advance for a personal reserved copy of the Contact Investment Statement.
Application to buy shares has to be made on the Contact Energy Share application forms which accompany the Investment Statement. So Priority Registration gets you in on the ground floor.
Immediately the share offer opens in April, a personal copy of the Investment Statement, and a personalised share application form, will be mailed to everyone who has priority registered.
Priority Registration is only open to New Zealand residents and each New Zealander can priority register only once. They can do so by:
Calling the Contact Energy Share Information Line on 0800 CONTACT (0800 266 822)
Clipping the coupon in newspaper advertising
Going through a Broker. People on Brokers' mailing lists will receive a letter and a Priority Registration form to fill in and return.
Priority Registration is not a commitment to buy. People who Priority Register are under no obligation whatever to buy Contact shares.
Indeed, nobody should make a decision to buy without obtaining and very carefully reading the Contact Investment Statement.
So, what are the advantages of Priority Registration?
Well, firstly, all New Zealand residents who priority register will be eligible to buy 25 per cent more Contact shares than the minimum allocation from the public pool.
Secondly, as I said, as far as obtaining information goes, you get in on the ground floor right from the start.
And finally, certainly not the least of its advantages, priority registration helps streamline the planning and administration of the float process.
Obviously, since it's not a commitment, it does not enable us to predict final demand for shares. People who priority register are not asked if they will buy, or how many shares they want, or what they will spend.
But it does help to estimate, in advance, the general popularity of the float. And that's important, because this one is big. It is likely be about twice the size of the Auckland International Airport float. The Government wants every New Zealand resident to have a fair chance to Priority Register, find out more about the proposed Contact sale, and ultimately, if they choose, to invest in Contact Energy.
Priority Registration opens now and closes at 5pm on Monday, March 15, giving New Zealanders three weeks to register their interest in receiving an Investment Statement.
The Government wants everyone to understand Priority Registration, how to do it, and what the benefits are. The process will be widely publicised through an advertising information programme that starts tomorrow night.
That programme, which includes both print and electronic media, will continue through to 14 March and will cost around $1.5 million. The advertising agency involved is Saatchi and Saatchi. They were selected by the Treasury, not us, in a competitive process conducted at arm's length from Government.
Meantime, in parallel with the Priority Registration programme and preparations to float 60% of the company, the proposal to sell the other 40% to a cornerstone shareholder is making good progress. A number of companies are currently undertaking due diligence. Final bids for that cornerstone shareholding are expected some time next month.
So, to sum up, Priority Registration closes at 5 pm on 15 March, and the announcement of the successful cornerstone bidder is expected some time after that.
At this stage, we expect the public offer to open some time in April and institutions in New Zealand and overseas will express their interest during the same month.
Institutions are, of course, an essential part of a successful float because they support the sale-there simply isn't enough spare money in New Zealand for a float of this size-and they also support the after-listing market.
If you have any questions, we'll be very happy to answer them.