Govt to buy up to $200m shares in Genesis capital raise

The Government has confirmed it will buy up to $200 million of new Genesis Energy shares as part of a $400m capital raise announced by the company.

Finance Minister Nicola Willis says the raise will support and advance the Government’s goals for secure and affordable energy.

“We confirmed last year that we would consider requests from all three Mixed Ownership Model energy companies for Crown investment in commercially sound generation capacity.

“Genesis’ proposed investments will directly contribute to enhancing energy security, including through enabling Genesis to bring more flexible capacity to the market which can be used to address dry-year risk”.

State Owned Enterprises Minister Simeon Brown says the Government’s investment aims to strengthen the performance and long-term value of one of New Zealand’s state-owned assets.

“This is about delivering better outcomes for Kiwis and ensuring we have a stronger, more secure, and more reliable energy system.”

Genesis requested a trading halt on the NZX and ASX, effective from before the commencement of February 23 trading, as it undertakes the capital raise.

The company is proposing to raise approximately $400m through a $100m placement and a $300m pro rata renounceable rights offer. The Crown has committed to subscribe for the number of new shares required to maintain its 51% holding following completion of both components of the offer.

The capital raise comes as Genesis reported record first-half earnings for the six months ended December 31, 2025.

The company posted a record normalised EBITDAF of $307m, driven by favourable spring hydro conditions and what it describes as market-leading fuel and generation flexibility under its Gen35 strategy.

Genesis says the result demonstrates the strength and resilience of its diversified portfolio and its ability to deliver strong earnings under variable market conditions.

Coal generation fell sharply to 164GWh from 710GWh in the prior corresponding period, as thermal assets shifted from baseload to flexible firming. Electricity netback increased 17% year-on-year to $172/MWh, reflecting what the company describes as disciplined pricing and improved customer mix.

The company says the $400m equity raise will initially reduce net debt and accelerate development of its renewable generation and dispatchable firming capacity pipeline.

Chief executive Malcolm Johns says: “Genesis has developed a strong pipeline of attractive growth investments, with this new equity raise offer enabling the acceleration of circa NZ$2 billion pipeline of growth opportunities to FY32 across renewables and dispatchable firming capacity.

“Acceleration of opportunities that meet Genesis’ capital allocation framework are expected to both enhance value for Genesis’ customers as well as shareholders by bringing forward earnings growth and strengthen Genesis’ ability to support New Zealand’s energy security.”

Genesis’ development pipeline includes projects with aggregate forecast generation capacity of around 2,500MW, including solar, wind and battery energy storage systems.

Construction on the 136MWp Edgecumbe solar farm is expected to begin in the fourth quarter of FY26, while the 271MWp Rangiriri solar farm has been acquired and is expected to generate about 437GWh annually once operational.

The company has also secured a power purchase agreement covering 70% of output from the Mt Cass wind farm in Canterbury, expected to deliver around 210GWh a year once operational.

An interim dividend of 7.3 cents per share has been declared, payable on March 25, with new shares issued under the placement and rights offer not entitled to that dividend.

Genesis has reaffirmed its FY26 normalised EBITDAF guidance of $490m to $520m and increased its FY28 target to the upper end of the previously indicated mid-to-upper $500m range. It has also published an FY32 normalised EBITDAF outlook of $650m to $750m.