New Zealand electricity retailer Genesis Energy has enjoyed a buoyant start to life as a publicly listed company, with its shares surging as much as 17.7 per cent when they started trading on Thursday.
Shares in Genesis, which also produces gas and generates electricity, were sold at $NZ1.55 apiece by the New Zealand government and added as much as NZ27.5¢ to $NZ1.825 in Wellington after they started trading at 1pm local time.
The shares in Genesis were sold in the IPO toward the top of the proposed range, raising $NZ733 million for the New Zealand government, to be redirected to infrastructure such as hospitals and schools. The stock will also trading in Sydney.
Genesis, New Zealand's largest electricity and gas retailer, is the last of four floats under the administration of Prime Minister John Key which raised a combined total of $NZ4.7 billion. The proceeds from the IPO's of Mighty River Power, Meridian Energy and Genesis Energy as well as the further sell-down of Air New Zealand, are being spent on public assets and infrastructure, including schools and hospitals.
The diversity of Genesis's business, which includes upstream gas production as well as thermal and hydropower plants, was attractive to investors, chief executive Albert Brantley told the Australian Financial Review last month. He said the flexibility of Genesis' power generation portfolio and its other businesses provided more stability of earnings, which flowed through to a higher yield for investors.
Australian and other non-New Zealand institutional investors ended up with just 12 per cent of Genesis after allocations were scaled back and preference was given to local investors.
Credit Suisse/First NZ Capital and UBS handled the IPO, in which 49 per cent of the company was sold. The government retains the remaining 51 per cent.
