2011 Valuation Reports

The Treasury has released Independent Commercial Valuation Reports for all the State-Owned Enterprises.

Under the State-Owned Enterprises Act 1986 (Legislation website), one of the principal objectives of a state-owned enterprise (SOE) is to operate as a successful business. As part of the reporting of that success, the boards of SOEs are required to assess their estimate of the commercial value of the Crown's investment and disclose their estimates annually in their Statements of Corporate Intent (SCIs).

To increase transparency of the value of the Crown's investment, the Treasury has commissioned independent commercial valuation reports. Engaging equity analysts to conduct valuations, based on publicly-available information, and publishing those valuations is also intended to provide boards with greater incentive to conduct more robust commercial valuations themselves.

The reports follow a similar format to those produced by investment banks on the New Zealand Stock Exchange listed companies. These research reports are designed to identify and examine the main drivers of company performance and, ultimately, value.

Since 2007 Macquarie Research has prepared valuation reports forMighty River Power and Genesis. This year the process has been expanded to cover all SOEs. The valuation reports commissioned by COMU are in addition to the valuations approved by the board of each SOE and included in the SCI.

The following table provides the comparison of the independent valuation reports commissioned with the SOEs' own commercial valuations. A discussion on these differences has been included, as a special topic, in the 2011 COMU Annual Portfolio Report.