SOE floats get FMA exemption

Investors keen on owning a share of Mighty River Power - owner of the Nga Awa Purua Geothermal Power Station - can now visit the new website to get more information on sale plans. Photo / Supplied

Investment watchdog the Financial Markets Authority has given the Government an exemption from rules around share floats, allowing it to give more detail on its partial asset sales plan.

However, the exemption from the Securities Act will also allow the media and public to better question the Government on its controversial "mixed-ownership model" under which it plans to sell up to 49 per cent of power companies Mighty River Power, Genesis Energy and Meridian, as well as coal company Solid Energy and a further stake in Air New Zealand.

State-Owned Enterprises Minister Tony Ryall yesterday launched a website to give the public more information about the sales plan.

"The website provides information about the share offer programme, including what mixed ownership means, why the Government is undertaking the programme, and how a public share offer works," Ryall said.

He also said the Government had been granted an exemption from restrictions on what owners of a business could say about it before they sell shares in the company.

He said the exemption would allow ministers to talk more freely about the aspects of the mixed ownership model.

"When taking into account who the promoter or shareholder is - which is the Government - and the fact there will be public debate around these things, you have to allow for the fact that the shareholder also has to participate in the public discussion in a way that a private promoter may not have to."

A securities law expert said though the exemption may mean ministers would feel less inhibited about speaking about details of the offer, they were unlikely to be open about controversial aspects such as how they would ensure New Zealanders were at the front of the queue for shares in the companies, or incentives to discourage people from on-selling shares to foreigners for a quick profit. However, it would in theory allow ministers to be more open in answering questions outside Parliament.

Further information: governmentshareoffers.govt.nz.