Sydney, 5 September (Argus) — The New Zealand government has delayed the initial public offering (IPO) of up to 49pc of power generator Mighty River Power to March-June 2013 from the third quarter of this year.
The delay will allow the government time for further consultation with the Maori community, known as iwi, over claims to water resources in an effort to avoid any future legal battles over the issue. Mighty River Power relies on hydro and geothermal sources for more than 90pc of its generation capacity.
The utility has nine hydropower stations with a total generation capacity of 1,038MW, all of which are located on the north island of New Zealand.
New Zealand prime minister John Key said the government has decided to undertake a short period of consultation with iwi on the 'shares plus' concept. An interim report released on 24 August raised the shares plus concept, under which certain Maori interests would be given particular rights and powers in relation to the company above and beyond the rights of other shareholders. The report was produced by the Waitangi Tribunal, which was set up in 1975 to investigate claims by the Maori community relating to government policy or actions that may impact the community.
The government has given careful consideration to the idea but its current view is that it should not be pursued, Key said. The government does not want any group within Mighty River Power's potential 49pc minority shareholding to be given more rights than other shareholders, he added.
But the government could address the issues raised in the Waitangi Tribunal report in other ways to provide some Maori interests in Mighty River Power with more rights than other shareholders. “If the 'shares plus' concept existed it was likely to make the company less attractive to investors, which could be reflected in a lower sale price and therefore be to the detriment of taxpayers,” Key said.
The government accepts that there remains a litigation risk, even after the extra period for consultation. “The Maori Council has told ministers that if the government does not follow the Tribunal's recommendations… it will take the government to the High Court to attempt to halt the partial sale of Mighty River Power,” Key said.
Mighty River Power's partial IPO is the first of several planned sales of stakes in state-controlled companies. Other assets targeted for sale include stakes in utilities Meridian Energy and Genesis Energy, coal producer Solid Energy and national carrier Air New Zealand.
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