New Zealand Sees NZ$736 Mln From Genesis Energy IPO as Price SetTracy Withers
New Zealand’s government will raise as much as NZ$736 million ($639 million) from the initial public offering in Genesis Energy Ltd., the nation’s biggest electricity retailer.
Shares in state-owned Genesis will be offered at NZ$1.55 each when the IPO opens tomorrow, Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall said in a statement today. The government is offering as much as 49 percent of the company and has commitments from institutions and brokerages for 40 percent already.
“Already, NZ$620 million has been committed through the bookbuild,” English said in the statement. “We have again delivered on our New Zealand ownership commitment, with Genesis expected to be 88 percent New Zealand owned when it lists.”
New Zealand last year sold close to 49 percent stakes in Mighty River Power Ltd. and Meridian Energy Ltd. in IPOs aimed at raising cash to fund infrastructure and reduce debt. Genesis is the last of the state-owned companies to be partially sold before a general election on Sept. 20.
“The program has provided a significant boost to New Zealand’s capital markets,” Ryall said. “The three energy company IPOs have added more than NZ$8.85 billion in capitalization to the NZX main board.”
The asset-sales program, which included selling down the Crown’s stake in Air New Zealand Ltd., is expected to raise NZ$4.7 billion, assuming all Genesis shares offered are sold.
The government in December reduced its forecast for proceeds from the asset-sales program to NZ$4.6 billion to NZ$5 billion from NZ$5 billion to NZ$7 billion, citing a revised valuation of Meridian and the withdrawal of Solid Energy New Zealand Ltd.
Genesis shares were priced at the two-day book build based on an indicative range of NZ$1.35 to NZ$1.65. The stock will list in New Zealand and Australia on April 17.
The shares were priced at the start of the offer period rather than at the end to give small investors greater certainty, and New Zealand brokers participated alongside institutions to bolster competition in the book build.
To encourage participation in the IPO, the government will offer New Zealanders one bonus share for every 15 owned if they have been held for a year after allotment, with a cap of 2,000 bonus shares.
Genesis had total assets of NZ$3.67 billion at Dec. 31. First-half revenue dropped 6 percent to NZ$973 million, the company said Feb. 12.
The company forecasts a 16 cents-a-share dividend for the year ending June 30, 2015, for a gross dividend yield of 14.3 percent, English said.