by Russel Norman
Yesterday, I announced a new plan that will keep more of Meridian Energy in public ownership.
Purchasers in the Meridian sale are paying for it in two instalments. They paid $1 in October and, in May 2015, they will be required to pay a second instalment of 50 cents, at which point their instalments receipts will be converted into ordinary shares in the company.
The Green Party will offer buyers of Meridian the option to not pay the second instalment and receive fewer ordinary shares, instead.
Take someone who made the minimum investment in Meridian – they paid $1,000 in October and owe $500 in May 2015, after which they will own 1,000 full shares. Our plan will allow them to avoid that $500 and, instead, return shares to public ownership. At a share price of $1.50 – they would end up with 667 shares and 333 shares would return to the government.
This option will be voluntary and open to all instalment receipt holders – ie all private investors in Meridian Energy, both retail investors and institutions. At a share price of $1.50, full take-up of the offer by investors would result in Crown ownership of Meridian of 68-69%, rather than 51%.
This plan means giving up some asset sales revenue but keeping more of Meridian in public hands. This is consistent with the Greens’ long-standing opposition to the sale of these shares into private ownership. It will also be fiscally positive as the greater dividend flow that the Crown will receive from owning more of Meridian will outweigh the increase in finance costs.
This plan offers a positive alternative to National’s failed asset sales.
Don’t forget that you need to get your vote in the asset sales referendum in the post as soon as possible. A strong ‘no’ vote will help to keep our assets Kiwi.