By Gareth Vaughan
Treasury is understood to be close to formalising the appointment of advisors to help it with preliminary work on the Government's proposed state owned enterprise (SOE) sell-downs with Deutsche Bank and a partnership between Cameron Partners and Rothschild said to be in the mix.
At least 12 parties, a proverbial who's who of the investment banking world, expressed interest in the role. Treasury is separately seeking individuals to advise on specific aspects of the preliminary work, and will also seek adviser(s) to do scoping studies on the SOEs.
Interest.co.nz was told that the Cameron Partners-Rothschild pairing and Deutsche Bank, which owns 49.9% of Craigs Investment Partners, were in the box seat to secure the highly sought after roles. A Treasury spokesman declined to comment.
Cameron Partners' founder, Rob Cameron, was head of corporate finance at Fay Richwhite where he played a key role in Telecom's privatisation and initial public offering in 1989 and 1990. Rothschild is the firm's global alliance partner. Ivor Dunbar, Deutsche Bank's London-based head of global capital markets who was involved in the recent General Motors float, recently visited New Zealand and told the NZ Herald that "big liquidity events" like SOE initial public offerings would encourages more people to invest in the sharemarket.
The National Party has pledged to reduce the Government's 100% stakes in Mighty River Power, Genesis Energy, Meridian Energy and Solid Energy to as low as 51% if it continues to lead the Government after the November 26 general election. National is also proposing to sell-down the Government's 76% stake in Air New Zealand.
The sell-downs, through sharemarket floats expected to give local investors a leg up over their international counterparts, would happen over a three to five year period starting in 2012. Treasury estimates implementation of this so-called mixed ownership model would free up between NZ$5 billion and NZ$7 billion of capital, to be put towards other areas of government spending.
Touted as a way of boosting "ma and pa" retail investors' investment opportunities away from property and collapsed finance companies, the SOE floats are also seen as a way of kicking some life into a moribund domestic sharemarket whilst the Government still retains control of the companies.
Should the sell-downs - opposed by the opposition Labour Party - ultimately go ahead, there are likely to be further advisory/management mandates sought, including those of actually floating the companies on the sharemarket. Ultimately, asset sales of such scale are likely to lead to tens of millions of dollars in advisors' fees to investment bankers and the big legal and accounting firms.
However, Labour is campaigning strongly against National's plans, saying the law should be changed so any sale could only be given the go-ahead if 75% of Parliament agrees to it, or if a majority of the public approved a sale via a referendum.
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6 Comments
Now this is surprising!
Top tier NZ banks: First NZ Capital, Goldmans, and Macquarie.
Cameron Partners: 2nd or 3rd tier. Tiny little advisory outfit with very little capability, resting on the past laurels of some senior members back from 1990.
DB: runs a skeleton crew in NZ, and while a decent name internationally relatively looked down upon by the NZ investment banking industry.
Me hopes this isn't true - considering this is the biggest structural change to the listed markets in at least a decade.
Let the feeding freenzy begin!!
Wow, Cameron has little/no distribution ability. DB is a joke. This is just fees for holding treasury's hands.
Any lets not forget the truely fantastic job which Fay Richwhite did selling the SOE assets in 1980/90's. Labour Government if your awake please get involved in this one
These assets need a global investment banker of serious credibility. Goldman and CSFB(First NZ) are the only two in NZ to make a serious job of managing this deal and have true global leverage.
Surprised Forsyth Barr has not got its grubby hands involved (oops no large finance company style advisory/brokerage margins here).
Scarfie - guillotines? Imagine in these days of skype and youtube..... the little old ladies would be serving lattes :)
What will happen, as the episode you refer to shows quite clearly, is that at some point, the disenfranchised get angry. They are always 90% of the population, and only well-armed regimes can resist them.
In our case, that means we buy back the life-essentials (energy being the obvious, water another) or if that is beyond reach, we simply take it back. Nationalisation by vote.
Watch Greece that way, it is probably as good a precursor as there is..
I think these folk are probably starting to run scared now. They were young and arrogant/confident back in the '80's, but it isn't working out as they ordained. There were always the two parts to them - the ones who cynically drove it, on behalf of a few, to get themselves 'richer'. Then there were all the second-tier mantra-chanters - Douglas, Richardson, Goff, English, I place inthe second category. There will be a general awakening at the moment, to the fact that 2007-8 and Peak Oil were all about limits.
Some will have epithanys - Treasury seems to be heading for Damascus - but most will try and force the pace - get as rich as possible.
Exactly the societal cross-section who did the tumbril-to-basket trip.
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