Federal Govt tightens rules on Snowy�s privatisation

RESPONDING to growing concerns over the privatisation of Snowy Hydro, the Federal Government has outlined more protective measures to ensure the company does not lose its Australian identity.
Federal Govt tightens rules on Snowy’s privatisation Federal Govt tightens rules on Snowy’s privatisation Federal Govt tightens rules on Snowy’s privatisation Federal Govt tightens rules on Snowy’s privatisation Federal Govt tightens rules on Snowy’s privatisation

Finance Minister Nick Minchin announced that new legislation would be introduced to cap total foreign ownership of the company at 35%, once it lists on the ASX in the next couple of months. In addition, no overseas individual or firm can hold more than 15% in the privatised entity.

The legislation introducing the changes is expected to be passed by Parliament next month.

A fortnight ago, the Australian, New South Wales and Victorian Governments announced the first wave of protective measures for the privatisation. These included preventing individual investors from buying more than 10% of shares in Snowy. However, this cap is only effective for four years, after which time shareholders will be asked to vote on whether to keep the cap in place.

Other protective measures announced at the time involved keeping the company’s head office in the NSW town of Cooma and maintaining a substantial business and operational presence in Australia.

In addition, at least two-thirds of Snowy’s board of directors, and its chair, must be Australian citizens, while the company will have to remain incorporated in Australia.

Currently, the NSW Government owns 58% of the 3700MW Snowy Hydro-electric scheme, with the Victorian Government owning 29% and the Australian Government 13%.

Snowy Hydro has been valued at $A3 billion and is set to be sold to the public via a prospectus due this month. It is expected to list and begin trading on the market in mid-July.

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