New Zealand’s Finance Minister Steven Joyce denies to sell off Transpower

New Zealand’s Finance Minister Steven Joyce denies to sell off Transpower

New Zealand’s Finance Minister Steven Joyce has denied the Government has plans to sell grid operator Transpower after NZ First leader Winston Peters released a confidential report by an investment bank on the options for a possible sale.

Peters asked Joyce about the Government plans after obtaining a confidential briefing by global investment bank UBS on options for sale of the grid operator.

Joyce said neither he nor Treasury had commissioned or knew of the document in question until Peters raised it.

There were no plans for a sale or partial sale of Transpower and the Government had said it would campaign on any further plans for asset sales in an election before implementing them.

“We said if we were ever going to do anything like that we would come back to the public first and talk about it. And we haven’t because we haven’t thought about it.”

He said companies put up pitches all the time: “the reality of it is, they’re what they call unsolicited pitches. They’d have to come to us before there was any indication anything was going to happen and they haven’t.”

Peters said he was sceptical about that denial and it seemed odd a company would prepare such a briefing “behind the minister’s back.” He would not say how he got it, but was confident it had been requested rather than an unsolicited pitch.

“So you’ve got people paying big money out there for transactional operations and background research, all being done in the name of the New Zealand taxpayer, and the minister doesn’t know? You’re dealing with a huge operation out of Switzerland that doesn’t go round pitching to people way out in the Antipodes without there’s a purpose.”

A spokeswoman for Transpower confirmed it had asked for the presentation from UBS in January but it had not asked for any advice or analysis on a possible sale of Transpower.

“It was a broad international utilities perspective piece done by UBS – an international firm – and they put that in there.”

She said there was “no substance” to claims a sale was planned. “As far as we are aware there is no plan to privatise Transpower. Obviously, ultimately that call would be made by the shareholder rather than us, but I’m sure they would confirm that as well.”

She said Transpower had requested a presentation for the board on international utilities and perspectives, which it regularly did to keep track of developments and new technologies overseas.

“Nothing has been done with that presentation since.”

Asked if board chair Tony Ryall had liked the sound of the analysis on a possible sale she said she did not think it was even discussed.

The paper lists various scenarios for Transpower and the time frames they could be achieved in – including a 100 per cent lease or sale to private investors, a partial sell-down with the Government retaining an interest, splitting the transmissions and system operations activities and selling off the transmission assets, or a share float similar to the “Mixed Ownership Model” used for other energy companies.

There is also analysis of how receptive the stock market would be to a new shares issue, which says the energy companies already sold have shown strong returns to shareholders, the NZX is trading at a premium and offshore investor interest is high but there is a lack of new issuance.

It includes an overview of sales of state electricity network assets in Australia and the governance arrangements used.

Transpower chair Tony Ryall is yet to return requests for comment.

As former State Owned Enterprises Minister, Ryall oversaw the sales of minority stakes in Air NZ and energy companies Mighty River Power, Meridian Energy and Genesis Energy in 2013 and 2014.

Ryall was appointed chair of the Transpower board in September last year and Peters said that raised suspicions about plans for Transpower.

In 2014, former Prime Minister John Key ruled out a sale of Transpower, saying it would not make sense because it was a monopoly. Joyce said he had not formed a view on that.

NZ Herald