Green Party proposal will keep more Meridian in public hands
New Green Party proposal will keep more of Meridian
in public hands
The Green Party has
announced it will offer investors in Meridian Energy the
choice of not paying their second instalment payment in
return for the Government retaining more shares in public
ownership, Green Party Co-leader Dr Russel Norman said
today.
In National's sale of Meridian in October,
investors paid a dollar per share up front and owe a further
50 cents in May 2015 to take full ownership of the shares.
The Green Party proposal will give investors the option to
opt out of the remaining 50 cents instalment and, instead,
receive fewer full shares which will remain in public
ownership instead (the number of shares investors forego
will depend on the current share price).
The shares
investors forego will go to the Crown to settle the
investors' payment obligation. If the share price in 2015 is
$1.50 and all investors take up this option, the Crown's
ownership of Meridian will be 67-68%, rather than
51%.
This option will be open to both individuals
and institutions and will be voluntary.
"This plan
will give investors choice and will see more of Meridian in
public hands," said Dr Norman.
“This is a smart
solution to keep more public ownership of Meridian. It is a
win for the public and a win for those investors that want
to get out of the Meridian sale.
"Effectively,
investors will be able to choose to settle their obligation
in shares, rather than cash. New Zealanders who don't want
to put more money into their Meridian investment will now
have another choice.
"The Crown will trade higher
ownership in Meridian for receiving slightly less asset
sales revenue.
"The higher net dividends that the
Crown will receive from owning more of Meridian, rather than
receiving asset sales cash, will add up to $18 million a
year to the government surplus.
“The Government
holding on to a greater number of Meridian shares is more
financially beneficial than selling them now.
"Instalment sales, such as National's sale of
Meridian, are notorious for investors refusing to pay the
second instalment, especially when the value of the shares
has fallen since the first instalment was paid.
"The Greens have steadfastly opposed asset sales
from day one. This move will keep more of Meridian in public
ownership.
“New Zealanders oppose asset sales. A
strong no vote in the current referendum sends a strong
message to the Government to use all means possible, such as
the Meridian proposal we have announced today, to keep as
much of our assets in public ownership.
"Further
options to return the assets to public ownership will depend
on the state that the Crown accounts are in following
National's record borrowing binge and the strength of the
mandate that we receive in the current referendum," said Dr
Norman.
Backgrounder on the proposal - https://www.greens.org.nz/factsheets/backgrounder-green-party-plan-higher-public-ownership-meridian-0
ENDS