Prime Minister John Key says that even if all the people who've registered interest in buying Mighty River Power shares actually apply for an allocation, they can all be accommodated.
New Zealand investors are guaranteed a parcel of up to $2000 worth of shares, and Mr Key says buyers who pre-registered are guaranteed at least $2500 worth.
Pre-registration closed at 5pm on Friday, with 440,000 names registered for interested investors. It was only available to New Zealand citizens or permanent residents.
Mr Key says the number of actual investors will undoubtedly be lower than the total pre-registrations, but there will be enough shares to enable the Government to keep its promise.
Need for balance
Finance Minister Bill English says the Government is conscious of the need to ensure that the shares are neither over-valued or priced too low.
Those interested will be able to see an investment statement and prospectus for Mighty River Power. They can apply for shares in early to mid-April and nominate the number or dollar amount of shares they want.
After that, the Government will set the price for the shares and decide on the final allocation. The sale of shares is likely to go ahead before the Budget in May.
Mr English says the high number of pre-registrations is a surprise.
Share price
But will that number drive up the share price?
"The Government understands the need to get the balance right here between the pricing that avoids the traps of over-valuation on the one hand, but on the other hand making sure we get fair value for the taxpayer who is selling down the 49%," Mr English says.
The minister told Radio New Zealand's Morning Report programme on Friday that the Government does not want to over-value the shares, it wants to get as much cash as is reasonable. He said the success of the offering will be known when people actually start handing over money.
And the decision to give five brokerage houses early access to information about Mighty River Power before the prospectus is released will not create an uneven playing field.
Labour's state-owned enterprises spokesperson Clayton Cosgrove says access to the financial information puts other investors at a disadvantage, but Mr English says institutional shareholders will get no advantage.
"The regulatory requirements around that are quite strict. There's no possibility of playing games with it in the way that Mr Cosgrove seems to be implying."
An industry analyst who did not want to be named, says demand is a factor - and more demand gives potential for a higher price.
While the Government has a duty to the taxpayer to get a fair price, it also has a duty to those investing - many for the first time, he says.
