16 Dec 2011

Treasury told to keep SOE sale costs down

7:18 am on 16 December 2011

The Treasury is on notice to keep a tight lid on the costs of the partial of shares in five State owned companies, with the Government vowing to keep them at about 1% of the total value of the assets.

Mighty River Power will be the first to be sold in a three year programme that's predicted to raise between $5 - $7 billion.

Mighty River is expected to float in the September quarter of next year.

Milford Asset Management executive director Brian Gaynor says asset sales have not been well run in the past and the investment banks involved in the process need to be strictly monitored.

''The more the Government can keep the costs down, the better it is,'' he said.

Mr Gaynor says timing and sharemarket conditions at the time, will be crucial.

However, he says Mighty River is the right choice to start the part asset sales, because it's well run, with stock market experience at management and board level.

The Crown's advisors, Deutsche Bank and Craigs Investment Partners, carried out their own survey of their retail client base, which found 90% expressed interest in investing in the companies earmarked for sale.

The Government says it will begin consulting with iwi early next year. While they want the best opportunity to participate in the sale, they won't be given preference.