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The Mixed Ownership Model Bill had its first reading in Parliament today and has been referred to the Finance and Expenditure Committee.
The Bill enables the Government to offer minority shareholdings in Genesis Power Limited, Meridian Energy Limited, Mighty River Power Limited, and Solid Energy New Zealand Limited.
The new legislation provides for the State Owned Enterprises to be shifted from the State Owned Enterprises Act 1986 and put under a new part of the Public Finances Act enabling the Government to offer minority shareholdings in the companies.
The first public share offering – for a minority share in Mighty River Power – is expected around the third quarter of this year, markets permitting.
"These public share offerings over the next 3 to 5 years will help us get on top of debt and pay for priority new public assets like modern schools and hospitals through a new Future Investments Fund," said Minister for State Owned Enterprises Tony Ryall.
The Bill secures the Government retaining at least 51% ownership in each company. It restricts any other shareholder from owning more than 10% of the voting rights in each of the companies.
"The Government is confident that 85-90 per cent of the companies will be owned by New Zealanders when floated." said Mr Ryall.
The constitutions of the mixed ownership companies will set out the detailed mechanisms required to ensure compliance with the 51 per cent and 10 per cent ownership caps.
Mr Ryall said the Bill is an important part of the National Government's wider programme to reduce debt, increase savings and get the country through one of the worst global financial crises in nearly a hundred years.
"No nation can afford to let debt get out of control. Huge debt is at the core of why the United Kingdom, Ireland, Spain, Italy, and Greece are being forced to impose austerity measures."
The new legislation continues to protect Maori interests by replicating the Treaty of Waitangi section 9 from the SOE Act into the new Part 5A, and sections 27A-D which cover Maori interests in memorialised land owned by mixed ownership companies.
As is now the case with Air New Zealand, the Government's policy decisions as majority owner of the four mixed ownership energy companies will remain subject to the Official Information Act. However the companies themselves will be excluded – as already happens with Air New Zealand.
Social responsibility objectives outlined in the SOE Act have not been included in the new legislation. The mixed ownership companies already build and maintain relationships with their communities through a variety of ways – just like most other large commercial entities.
"Before making decisions about Air New Zealand, the Government is seeking further commercial advice on implementing its policy, because of the greater complexity around Air New Zealand's existing shareholding," said Mr Ryall.
The Bill was referred to the Finance and Select Committee which will hear public submissions and then report back to Parliament before 16 July 2012.