Bennett David: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeBennett David: Questions for Oral Answer — Questions to Ministers[Sitting date: 24 September 2013. Volume:693;Page:13597. Text is incorporated into the Bound Volume.]2.DAVID BENNETT (National—Hamilton East) to theMinister of Finance: What recent progress has the Government made in its share offer programme—and particularly putting everyday New Zealanders at the front of the queue for shares?Hon BILL ENGLISH (Minister of Finance): Last week we registered the offer for the sale of a minority shareholding in Meridian Energy. This is the largest initial public offering expected in Australasia this year. The document provides information to help New Zealanders decide whether to invest in New Zealand’s largest electricity company. The share offer is expected to open to New Zealanders on Monday 30 September and close at 5 p.m. on Friday 18 October. The final share price is expected to be announced on 23 November. We expect Meridian Energy to be listed on the stock exchange on Tuesday 29 October. As with other offers in the programme the Government has made it clear that New Zealanders will be at the front of the queue and we want at least 85 percent New Zealand ownership.David Bennett: What offer features are being provided for New Zealand retail investors in the Meridian Energy share offer compared with large institutional or overseas investors?Hon BILL ENGLISH: The Government is making it as easy as possible for New Zealanders to access information and if they wish to buy Meridian Energy shares. The indicative price range for New Zealand retail investors is $1.50 to $1.60 a share paid over two instalments. The first instalment will be a $1 share and the second will be no more than 60c a share 18 months later. So the total price for New Zealand retail investors is capped at $1.60 a share even if institutional and offshore investors pay a higher price. The indicative price range for them is $1.50 to $1.80 and there will be no price cap.Hon Clayton Cosgrove: Given that his 2011 Cabinet paper stated that $3.1 billion would be raised from the sale of Meridian Energy why has he not revised the promised $5 billion to $7 billion to be raised from asset sales given that he now expects to receive only around $2 billion from the sale of Meridian Energy?Hon BILL ENGLISH: As the Prime Minister indicated I think a week or so ago we would expect the proceeds to be around the bottom of that range around the $5 billion mark which is $5 billion of cash that we will get from New Zealanders investing in a New Zealand company which we will then reinvest in other public infrastructure. We are very proud that we can do that investment without borrowing from offshore lenders.David Bennett: What does the Meridian Energy offer document say about forecasts for the company’s dividends and what kind of return would they represent for investors in the share offer?Hon BILL ENGLISH: Given that investors will pay $1 of the issue price up front they will receive dividends in full during the 18-month instalment period. This provides investors with a higher-dividend yield during that instalment period. Meridian Energy is forecasting a gross instalment yield of 13.4 percent over the first 12 months. The company’s underlying gross share dividend yield for New Zealand retail applicants will be around 8.4 percent to 8.9 percent for the same period. This is the forecast return if investors pay for their shares in full.David Bennett: What alternative approaches to the share offer programme are available?Hon BILL ENGLISH: There has been some criticism of the share offer programme but we do not take the political criticism seriously because none of the people who have criticised it have promised to borrow the $5 billion offshore and buy back the company. I think that means that they do not really oppose the asset sales. [Interruption]Mr SPEAKER: Order! [Interruption] Order! Order—if the member wants to stay for the balance of question time.