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Treasury picks big brokers, banks to run retail component of asset sale

Thursday 30th August 2012

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The Treasury has named all of the major broking firms and biggest banks to run the retail investor component of the government's plan to sell down stakes in its energy companies.

Interested retail investors in the MightyRiverPower sale, tentatively set for some time this year, will be run by ASB Bank, ANZ National Bank, Craigs Investment Partners and Forsyth Barr, according to the post-award contract published on the Government Electronic Tenders Service.

They were chosen from a larger line-up from which Treasury officials will choose managers for subsequent sales, including Bank of New Zealand, Goldman Sachs New Zealand JBWere New Zealand, Macquarie Capital (New Zealand), Westpac New Zealand, Kiwibank, and First NZ Capital.

The Treasury is expecting as many as 250,000 retail investor applications for each of the power company sell-downs. When the government privatised Contact Energy in 1999, it attracted more than 160,000 retail investors.

The government expects to spend $100 million in investment bank fees as it seeks to raise between $5 billion and $7 billion from the floats. The cash raised will be used to fund investment in new infrastructure, with the loss-making KiwiRail's network upgrade first in line.

Earlier this week Prime Minister John Key indicated the government remains determined to try to launch the MRP initial public offering, in spite of a Waitangi Tribunal report last week that called on the government to halt the process while a settlement is reached with Maori over legitimate claims to proprietary rights and interests in fresh water under the Treaty of Waitangi.

The retail brokers will have to help market the sale to retail investors, attend roadshow meetings, "use all reasonable endeavours to procure subscriptions from New Zealand resident retail investors for the offer," and offer advice as required.

Members of the retail syndicate won't be allowed to market, offer, or sell shares to institutional investors, unless it's in their capacity as one of the joint lead managers.

First New Zealand Capital working with Credit Suisse Australia, Macquarie Capital New Zealand, and Goldman Sachs New Zealand with JBWere are the joint lead managers for the MRP sale, while UBS New Zealand, Forsyth Barr working with Merrill Lynch, Deutsche Bank and Craigs Investment Partners are also available for subsequent offers.

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