What you need to know about the Vector float

Vector float

Q: Where will Vector rank on the sharemarket?

A: With an initial market capitalisation of $2.38 billion, Vector will the sixth biggest on the NZX if the top companies are still at the same size when it lists on August 26. But just 24.9 per cent of its shares are able to be owned by private investors, with the rest held by the publicly elected Auckland Energy Consumer Trust.

Q: How many shares will Vector's income beneficiaries (those power users with accounts in Auckland City, Manukau City and Papakura) get?

A: It depends on how many NGC shareholders and Vector capital bondholders take up their offer. If they all do, and 15 per cent of the beneficiaries also want to take up the offer, one estimate is that they will get a minimum of about $1375 of shares. Methods vary for scaling back share applications.

Q: Why are more shares not available for these consumers?

A: The priority for Vector is buying up the remaining one-third of gas company NGC that it does not already own. Because it will pay NGC shareholders in a mix of shares and cash, fewer shares are left for other investors. If Vector completes a 100 per cent takeover of NGC and hands over $153.5 million of shares to the Vector bond holders, who have priority rights, $59 million of shares will be left for the beneficiaries. However, it is possible that not all bond-holders will take up their entitlements, increasing the pool for the rest.

Q: What dates are important?

A: The beneficiary offer - for eligible Vector power consumers - closes at noon, August 10, although the deadline for pre-registrations has already passed. The capital bondholder offer closes at 5pm on August 1. The NGC takeover offer opens on July 11 and closes 5pm August 10. New Vector shares are due to start trading on the stock exchange on August 26.

Q: Why do brokers expect the shares to list at a premium?

A: A combination of the attractiveness of the company and the shortage of shares.

Q: Can the listed company be taken over?

A: Since the AECT owns 75.1 per cent of its shares this depends on the trust.

Q: Does the listing affect payments to Vector beneficiaries?

A: Vector chairman Michael Stiassny says because the company is now so much bigger, dividends for beneficiaries will double. (These are paid out in the form of an annual rebate on power bills)

Income beneficiaries do not own the existing shares in Vector, the AECT does.

Q: Is it too late for me to get shares?

A: Income beneficiaries can ask for an investment statement from Computershare and put in an application form.

However, these requests will rank behind those people who have already filled in the pre-registration form since the deadline has already passed.