N.Z. Brokers Commit to 45% of Meridian IPO Shares, English Says

New Zealand brokers have committed to buy about 45 percent of the Meridian Energy Ltd. shares available in an initial public offering, Finance Minister Bill English said.

Bids on behalf of existing clients reached 565 million shares, English said in an e-mailed statement yesterday. The offer of 1.26 million shares opens today. New Zealand applicants will pay no more than NZ$1.60 a share, with the first installment set at NZ$1.

New Zealand’s government is seeking to raise about NZ$2 billion ($1.7 billion) from the sale of as much as 49 percent of Meridian, the nation’s largest power generator. The sale is the second in a program expected to raise NZ$5 billion.

“The initial pre-commitment from New Zealand brokers just one week after the offer document was lodged is pleasing,” English said. “Feedback from brokers has been supportive of the offer, with Meridian’s strong forecast dividend yields, the price cap and the enhanced dividend yield provided by the installment payment structure, proving to be attractive.”

The gross yield based on an offer price range of NZ$1.50 to NZ$1.80 a share is 7.4 percent to 8.9 percent in 2013-14 and 8.2 percent to 9.8 percent a year later.

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