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MightyRiverPower debuts at $2.73, a 9.2 percent gain from IPO

Friday 10th May 2013

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MightyRiverPower shares climbed 9.2 percent to $2.73 when they debuted on the NZX as investors who'd been scaled back in the initial public offering sought to lift their holdings on market.

Initial trading gives the state-controlled power company a market capitalisation of $3.82 billion, catapulting the company into the top 10 domestic stocks on the market, from $3.5 billion at the offer price. The government raised $1.7 billion selling 686 million shares, or 49 percent of the company, at $2.50 to local and overseas investors.

MightyRiverPower is the first of four SOEs plus Air New Zealand that are slated for selldown under a government policy to raise as much as $7 billion to repay debt and seed its Future Investment Fund, which is to help fund investment in school, hospitals and transport infrastructure such as KiwiRail.

Finance Minister Bill English may detail plans for further share sales in Genesis Power or Meridian Energy at next week's budget. Air New Zealand could follow, though coal miner Solid Energy is being restructured to return it to profitability before it will be considered.

New Zealand institutions were allocated 8.6 percent of the shares on offer and overseas funds got 13.5 percent, with both scaled back considerably. A total of 113.857 individual New Zealand investors bought shares, accounting for 26.9 percent. The government retains 51 percent.

Based on forecast dividends, the offer price implies a gross dividend yield of 4.6 percent in the 2013 financial year, rising to 5.2 percent the following year.

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