The New Zealand government approved a NZ$3.2 billion initial public offering (IPO) of power generator Meridian Energy. It is the largest IPO in New Zealand's history.

YouTube/MeridianEnergy

Meridien is a government-owned company and is selling 49 per cent to the public via the IPO at NZ$1.50 share as the lowest share price. Retail investors could purchase stocks up to NZ$1.60, while institutional investors could buy up to NZ$1.80.

By listing the company, the government is partially privatising Meridian as the John Key-led government aims to raise up to NZ$6 billion selling government assets to reduce Wellington's budget deficit through June 2015.

However, only 62,000 New Zealand investors have purchased Meridian shares despite intensive advertising effort by the government of the IPO. In contrast, when MightyRiverPower listed publicly in May 2014 at NZ$2.50 per share, the IPO attracted 113,000 investors, although its share price has gone down to NZ$2.20.

Explaining the lower number of investors for Meridian, Finance Minister Bill English said at a press conference at the Beehive, quoted by the New Zealand Herald, "Bear in mind the circumstances. We have the impression a lot of Mums and Dads were scared off by the Labour-Greens policy." He added the uncertainty over the Tiwai Point aluminium smelter and electricity demand are weaker contribute to the slower uptake of the Meridian IPO shares.

Meridian will officially list on Oct 29 at the Australian and New Zealand Stock Exchanges.

Due to the less enthusiasm among Kiwis for Meridian stock, Labour Party state-owned enterprises spokesman Clayton Cosgrove said the IPO is a failure.

"John Key and Bill English's asset sales are officially a farce as Meridian was sold off for $1.2 billion less than they promised and attracted just 62,000 investors," he said.

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