By Rebecca Howard and Lucy Craymer
WELLINGTON, New Zealand--The sale of Mighty River Power is going
ahead as planned, New Zealand Prime Minister John Key said on
Tuesday.
Offer documents for the partial privatization of state-owned
Mighty River Power Ltd. will be made public on Friday, Mr. Key
said.
"What we need to do is what has happened; that is to ensure that
the offer document that you will see released later in the week
fully discloses the risks and the impact of what might happen," Mr.
Key told a news conference.
"What's really important is that the analysts who look at these
things fully understand what the options are and fully understand
the impact on the value of these companies," he said.
Valuations of New Zealand electricity companies could be
squeezed by the closing of the country's only aluminum smelter
creating a power glut.
The smelter, owned by Rio Tinto (RIO) unit Pacific Aluminium,
gets its power from Meridian Energy Ltd.--another state-owned
generator up for partial sale. Pacific Aluminium wants cheaper
electricity because aluminum prices have fallen. If it doesn't get
this it could close the smelter.
The smelter uses 14% of New Zealand's total electricity
consumption and its closing will mean a capacity glut.
The government wants to almost halve its ownership of Mighty
River Power to 51%. It wants to do the same with Meridian Energy
and Genesis Energy Ltd. It intends to reduce its holding in Air New
Zealand Ltd. (AIR.NZ) to 51% from 74%.
The up to 7 billion New Zealand dollars (US$5.9 billion) it
hopes to raise will go towards its promise of a budget surplus in
the year to June 2015.
Write to Rebecca Howard at rebecca.howard@wsj.com
