Monday 24th March 2014
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The head of the Treasury unit in charge of the partial privatisation process is leaving to pursue roles in the private sector on the eve of the last of the four asset sales undertaken over the past 13 months.
John Crawford will leave the Treasury at the end of this week after almost six years as a public servant and told BusinessDesk he had looked for but not found other opportunities in the public sector.
Genesis shares will be priced at the end of this week and list on the NZX and ASX on April 17.
Crawford initially served in the Department of Prime Minister and Cabinet first under Prime Minister Helen Clark and then John Key. He headed the reintegration of the Crown Operating Monitoring Unit, formerly a standalone entity known as the Crown Company Monitoring and Advisory Unit, into the Treasury, and was placed in charge of the transactions arm of the unit.
That led him not only into the privatisation process, but also into the management of the Crown's interest in the receivership of collapsed finance company South Canterbury Finance and the rescue package for the state-owned coal miner Solid Energy.
"Once the Genesis transaction was conceived an designed, I decided to return to Auckland unless a substantial role that suited my particular skills emerged in the public sector," said Crawford, who has commuted from Auckland to Wellington for much of the past six years.
The asset sales policy has been politically unpopular and there were criticisms of over-pricing of the MightyRiverPower float last May, and failing to excite investor interest in the Meridian Energy float last year.
The Genesis float is attracting more bouquets from the investment community, in part because the prospective listing price range of $1.35 to $1.65 a share is seen as low, while offering what broking firm Forsyth Barr last week called a "turbo-charged" dividend yield in its first two years.
That's partly because retail investors who hold Genesis shares for at least a year will receive one bonus share for every 15 shares they buy in the float, raising the dividend yield in the 2015 financial year to between 13.5 percent and 16.5 percent.
Least controversial was the institutional placement of shares in Air New Zealand before Christmas, taking the government's controlling stake in the company from 74 percent to 51 percent.
Crawford defended the structure of the MRP and Meridian floats.
"The right decisions were made on the information we had at the time," he said. He would not be drawn on the impacts of the Labour-Greens single buyer New Zealand Power policy proposals.
Also hitting the process was the renegotiation of Meridian's contracts to supply electricity to the Rio Tinto-controlled aluminium smelter at Tiwai Point. That sharpened investor and public focus on the potential for the smelter to reduce or terminate operations, which currently use about one-seventh of the country's total electricity output.
As a result, and because Solid Energy was pulled from the sale process because of its financial distress, the programme will undershoot its original $5 billion to $7 billion target for funds raised to fund government capital projects, instead of raising additional government debt.
Since the Supreme Court decision on Feb 25 last year allowing asset sales to go ahead, there had been three IPO's, as well as the Solid Energy negotiation.
"It's been an incredible 13 months in terms of what's been achieved," said Crawford.
Prior to joining DPMC and then Treasury, Crawford worked in corporate advisory roles at Boston Consulting Group and in merchant banking for Deutsche Bank in New Zealand.
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