Hamish Rutherford at Stuff reports:
State-owned Meridian Energy has taken a $90 million writedown on some of its niche businesses as part of a “tidy-up” as it prepares for life as a private company.
The National Government has said if it wins the November election it may sell up to 50 per cent of several large state-owned companies.
Announcing a 13 per cent fall in underlying profits at group level, the accounts of the parent company of New Zealand’s largest electricity generator showed tens of millions in writeoffs on loans and investments in subsidiary businesses which the company acknowledges it is unlikely to recover.
This is one of the significant advantages of allowing minority share-holding in SOEs. Being listed on the NZX means the companies have to be more transparent with their finances, and have obligations such as continuous disclosure.
As an SOE it looks like Meridian has been carrying these impaired assets for some years at an unrealistic valuation. You can’t do that so much when you are a publicly listed company.Tags: Meridian, privatisation