Mighty River squanders $3.8m preparing for sale

Mighty River’s annual report reveals that it has spent $3.8m in the year to June 2012 preparing itself for sale under the Government’s asset sales agenda, Green Party Co-leader Dr Russel Norman said today.

The annual report states: “Expenses incurred by the Company during the year relating to the preparation for a potential listing totalled $3.8 million, comprising $3.1 million of direct issue expenses (predominantly professional services) and an additional $0.7 million relating to employee compensation and benefits and other expenses.”

“The costs of National’s asset sales policy just keep on rising,” said Dr Norman.

“The $3.8 million spent so far by Mighty River has to be paid for by New Zealanders either via their taxes or through higher power prices.

“That’s on top of $1.3 million spent by the other companies that National wants to sell, nearly a million dollars so far spent on the Waitangi water rights hearings, and $10.5 million on public relations and policy advisors. A total of over $16 million has been spent before sales have even begun.

“And that’s just the tip of the iceberg: the Government has a further $96 million budgeted to spend on the sales and there are huge unbudgeted costs such as hundreds of millions for the share giveaway.

“These results also point to the huge cost in lost dividends if asset sales proceed. If Mighty River had been sold already, the Crown would have lost nearly $60 million in dividends last year.

“The total bill for National’s asset sales now stands at over $16 million and will rise into the hundreds of millions if the policy continues.

“New Zealanders do not want asset sales and they do not want the Government wasting millions of dollars on this economically unsound policy.

“National’s asset sales policy is in crisis and the costs are out of control. It is time for National to drop asset sales,” said Dr Norman.