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Monday, November 26, 2012

Giving 110%

The Tory's state asset privatisation plans hinge on the outcome of the Maori Council's water challenge. It starts today:
via Twitter:
Adam Bennett‏@AdDeville
Packed press bench for the Maori Council, Pouakani etc vs the Crown over the Mighty River sale in the High Court in Wgtn today.
Retweeted by
In anticipation of the privatisation goldrush, Mighty River Power's board has raised the looting perception comensurately:
State-owned electricity company Mighty River Power is raising its dividend policy from 75 per cent of earnings to between 90 per cent and 110 per cent, saying it has fewer investment needs in the near future, and sweetening its attraction for investors in its partial privatisation.
The Government plans to offer up to 49 per cent of the Auckland-based firm, which owns the Mercury Energy brand and a string of hydro and geothermal power plants in the central North Island, for sale in the second quarter of next year.
That assumes court action by three Maori bodies, led by the New Zealand Maori Council, fails to block the sale in the courts and that market conditions are judged appropriate for the first of three SOE power company floats.
In earlier posts I expressed an expectation that the company would end up taking on a load of new debt in order to boost dividends for the incoming shareholders. A 110% target cap seems to indicate this is the direction even if the borrowing stats aren't specific enough to confirm it.
Also from the MRP board is a position of uncertainty over the Maori Council's action.

Mighty River Power holds land and interests that may be impacted by certain claims that have been brought or are pending against the Crown under the Treaty of Waitangi Act 1975. In the event that
the Crown agrees to the return of some or all of the impacted land, resumption would be effected by the Crown under the Public Works Act 1981 and compensation would be payable to the Company. A claim relating to fresh water and geothermal resources is currently under consideration by the Waitangi Tribunal. The impact of this claim is unknown at this time.
The more specifics that come into the public sphere and into public knowledge about just how profitable the Crown power companies are will both encourage share purchases and also encourage resistance to it.



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