The share sale of the Mighty River Power Ltd, worth at least NZ$1.6 billion, is largest initial public offering in New Zealand. The offer would test investor appetite for the state owned assets as the government is keen on cutting back on its loans and debt payments.
Nearly 49% of the utility is being sold off by the government. As of last month, the price range being pegged is between NZ$2.35 and NZ$2.80 per share. The auction will be done over two days for institution starting today and stock trading starts on May 10.
This anticipated sale comes in the midst of Prime Minster John Key's efforts to raise between NZ$5 billion and NZ$7 billion through share sales of state owned firms and reduce reliance on loans for the budget. He plans to meet a budget surplus by 2015.
Amongst the shares the government is being sold off are interests in Meridian Energy Ltd, Genesis Power Ltd and Air New Zealand Ltd. The government is banking on the increased demand for high yield assets while interests remain at all time low levels.
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