Genesis Energy is seeking $400 million in new capital through a combination of share placements and a rights offer, a move Finance Minister Nicola Willis said will enhance New Zealand’s energy security. The company announced the fundraising plan alongside record first-half earnings, reporting normalised earnings before interest, tax, depreciation, amortisation and financial instruments (ebitdaf) of $307 million, up from $222 million in the prior comparable period.
The offer consists of an underwritten placement of $100 million at $2.15 per share and a 1 for 7.9 pro rata renounceable rights offer to raise $300 million at $2.05 per share. The share price closed at $2.41 on Friday, representing a discount to the current trading price.
The capital raise follows a government signal last year that it would consider allowing its 51%-owned power companies – Genesis, Mercury, and Meridian – to seek additional capital. This openness stemmed from a Frontier Economics report suggesting potential capital constraints within the sector.
According to Willis, the proposed investments by Genesis will directly contribute to bolstering energy security, particularly by enabling the company to increase flexible capacity to mitigate risks associated with dry-year conditions. While Genesis is proceeding with the capital raise, Mercury and Meridian are not currently expected to follow suit.
Genesis Chief Executive Malcolm Johns expressed confidence in the success of the offer, citing a loyal shareholder base and a $2 billion growth program through 2032. “We’ve got a great set of loyal shareholders, and we’ve set out a pretty aggressive $2 billion growth programme out to 2032 that serves our customers, our shareholders, and the country really well, so we would expect it to be well supported,” Johns told the Herald.
The company’s net profit for the half-year was $95.1 million, an increase from $70.3 million. Johns attributed the strong results to the diversified Genesis portfolio, which includes the Huntly coal and gas-fired plant, solar farms, and hydroelectric stations. He noted that despite record-low lake inflows and snowpack in July, spring storms ultimately improved hydro conditions.
Genesis maintained its 2026 normalised ebitdaf guidance at $490 million-$520 million. However, the 2028 target was increased to the upper end of its previously indicated range, now targeting mid to upper $500m. The company also reaffirmed its 2032 normalised ebitdaf outlook of $650 million-$750 million, citing the foundations laid for new renewable energy projects that will lower generation costs.
Last year, Genesis secured deals – known as Huntly Firming Options – with other major generators to fund the 1.1-million-tonne coal stockpile at Huntly, which provides backup power during dry periods. The company’s 500,000-strong customer base is seen as a key area for future growth.
Commenting on the government’s plan for a liquefied natural gas (LNG) terminal at Port Taranaki, Johns indicated that gas from the plant could be used to fuel the gas-driven turbine at Huntly – Unit 5 – which is currently operating at 50% capacity due to fuel constraints. Should the LNG terminal proceed, Genesis intends to utilize the Huntly Firming Option structure to fund Unit 5 and maintain it as standby capacity.
Genesis anticipates winter 2026 conditions will return to more normal seasonal patterns, with thermal baseload and firming capacity available to ensure system security. Coal-powered generation decreased to 164 gigawatt hours (GWh) from 710GWh in the prior corresponding period, as thermal assets shifted from baseload to flexible firming. “This integrated portfolio response reduced Genesis’ carbon emissions and lowered the cost of generation,” the company stated.
Jarden acted as the equity underwriter for the Genesis offer, while Citi served as the financial advisor. The Department of Energy announced a $320 million investment to advance Genesis Mission’s AI capabilities in February 2026, according to a separate report, aiming to accelerate scientific discovery and strengthen national security.
