Ownership and Profits Disappear Offshore

An Observation by The OWL.

“but they get to watch ownership and profits disappear offshore” – EMPU 205 Newsletter

Extract from EMPU No. 205 Newsletter May 2011 (Source: EMPU Website)

Asset sales
The Government had signaled well before its Budget announcement that the sale of public assets was on the cards. It was confirmed in the Budget that the state owned energy companies Mighty River Power, Genesis Energy, Meridian and Solid Energy will be partially privatized if the Government wins the next election. The Government will also reduce its stake in Air New Zealand.

The sale of publicly owned assets is expected to raise about $7 billion over five years starting in 2012. The Government has said that New Zealanders would be given preference in buying shares, although brokers have warned that shares can easily be resold to institutions and end up in overseas hands. Not only do workers have to suffer the indignity of buying back what they already own – and in some cases have built with their own hands – but they get to watch ownership and profits disappear offshore.

Extract from EMPU 2011, 2010 and 2009 Financial Accounts. (source MED NZ Societies and Trust Office)

Investment Foreign Exchange Gain/(Loss)
2011  ($6,479.00)
2010  ($80,906.00)
2009  $152,709.00

“but they get to watch ownership and profits disappear offshore”.

Are the two related?


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  • Currency trading – isn’t that what John Key used to do?

    • Yeah but unlike the EPMU he made $50million at it.

  • Timandtim

    I think you maybe right – maybe Andrew Little can have a cup of tea with him at Bellamys and they can discuss how EMPU should hedge their foreign investment portfolio.

  • Peter WIlson

    Not only do workers have to suffer the indignity of buying back what they already own

    What is this nonsense? 

    • Timandtim

      nonesense on the WO article or nonesense that EMPU wrote? I couldnt work out what they meant either – that is EMPU for you.

      Will be interesting next time Andrew Little stands up in Parliament and discusses foreign ownership issues dont you think?

  • johnbronkhorst

    some numbers for you…Mr Little. The assets currently about $300 million /yr..Not including one off sales of assets (in Aussie). If we sell 49% we lose $147 million in direct income to the govt., However The 49% will be subject to 28% company tax, will it not (being a private entity now)? ie the govt will get 28% of $147 million returned in tax…or $41 million. Then what of the $7 billion (and heres the bit Labour always forget) in CASH for the sale, invested in a term deposit account, which is probably the worst hing you could do @ approx 4% your return is $280 million. So no wonder nobody wants to show potential investors the books because they will notice that they have been under performing for years. $280 + $41 +$147 = $468 million per year. Again the numbers may not be perfect, but you get the principle!

  • In Vino Veritas

    Financial illiterates. When a business is sold at any sort of multiple, you are selling the future profits or dividend streams. Those future revenue streams are discounted back to todays dollars, thereby giving a value to the asset. Essentially, the government are going to forgo future profits by collecting them all up front. Sooo, for the EPMU and the Labour Party to say the profits are going overseas is a nonsense, and just goes to show how inept financially and economically they are. God help us when they get back into parliament.

  • jay cee

    perhaps they learnt their lesson after the sell down of telecom? how much have they made in total over and above their purchase price again?

  • Timandtim

    I think what this says it that Andrew Little and EMPU not only support foreign investment – they operate in that market as well – how else do you get FEX gains or losses? Should they return the $152k back to the country or workers who QUOTE “and in some cases have built with their own hands – but they get to watch ownership and profits disappear offshore.”

    Nice work OWL