The Government has achieved a good outcome with its sell-down of its Air New Zealand stake, an analyst says.
It sold 221 million shares at $1.65 each on Tuesday, the same price they closed at last Friday, reaping it a $365 million return. The sale reduces the Government's stake to 53%.
Historically, large placements of shares tend to sell at discounts to the prevailing market price, and Air New Zealand's shares have risen strongly in recent months.
Sharebroker William Curtayne from Milford Asset Management said strong demand for the shares meant investors were willing to pay market prices.
Harbour Asset Management managing director Andrew Bascand said the sale meant the Government reduced its risks in owning the airline while still maintaining control.
"For markets, we've now got a more liquid investment to consider for our investors. I think that's great," Mr Bascand said.
"Many of us probably wouldn't have considered Air New Zealand before because it really wasn't that liquid."
He believed the $1.65 price was towards the top end of the price target and said if asked a few weeks ago, he would have predicted lower.
Mr Bascand said there was strong domestic demand. "It looks fairly well balanced between retail and domestic institutional, and I think that's pretty good because KiwiSaver funds will now get a good holding in Air New Zealand, and that's probably up to a million New Zealanders," he said.
"It's a good outcome."
Opposition says sale far from success
The Government says the share sale was one of the most successful of its type in recent times and 88% of the company will remain in New Zealanders' hands.
But the Labour Party says the Government knows very well that it has no control over where those shares go in the long term.
It says the overall asset sales programme is still about $1 billion short of what the Government had hoped to make.
The Greens say the country is losing control of its key strategic assets, pointing out that 16% of the Air New Zealand shares sold have already gone overseas.
Of the shares, 41% were bought by New Zealand sharebrokers who will sell them on to investors, another 43% of the shares went to New Zealand institutions and 16% went immediately overseas.
The Government has now earned almost $4 billion from its partial share sales of Air New Zealand, Mighty River Power and Meridian Energy. It expects to sell shares in Genesis Energy in early 2014.
