Vector listing ignites market

Energy company Vector today made its sharemarket debut at $3.00 -- a 26 per cent premium to its issue price.

Vector's $600 million share issue -- the largest local float in six years -- ignited an otherwise lacklustre market, and after ten minutes of trading the shares climbed to $3.12.

The initial public offer (IPO) closed oversubscribed on Friday, attracting a groundswell of interest from institutional and "Mum and Dad" investors.

Many investors were left wanting, with a sizable majority going to shareholders in gas distribution and metering company NGC, as part of a share-swap takeover deal.

Today's listing was the first chance for investors to get free access to the stock, although institutional investors have been using NGC -- which traded up 25c at $4.10 this morning -- as a proxy for Vector shares since early June.

The Auckland-based lines company offered 249 million shares worth $593 million.

Only 30 million shares, at an issue price of $2.38, were available to Auckland consumers -- beneficiaries of the Auckland Energy Consumer Trust (AECT).

The lion's share, worth $380 million, were allocated to NGC shareholders who were offered $3.40 for their shares as Vector moved to full control of the company, with $2.62 of the price paid out in new Vector shares.

Vector capital bondholders will receive shares worth $140 million.

All up, Vector will have more than 49,000 shareholders.

Vector bought 66 per cent of NGC last year from Australian Gas Light. The $593 million raised from the IPO will be used to pay off debt resulting from that purchase.

NZX chief executive Mark Weldon said the Vector listing was extremely positive.

"New Zealand investors now have an opportunity to buy a stake in one of the country's most important infrastructure companies."

The share issue represents 25 per cent of the company, which is majority-owned by the Auckland Energy Consumers Trust.

Vector will rank between 10th and 20th in the NZSX top 50 index, based on its free float market value.

- NZPA