(Transcript from SBS World News Radio)
The initial public offering of Medibank Private is tipped to be one of largest seen in Australia for some time.
The Coalition is hoping to offload 100 per cent of the enterprise, with pre-registration for the share offer now open.
Abby Dinham reports.
(Click on the audio tab above to hear the full report)
Australia's biggest private healthcare insurer has taken the first step towards privatisation.
Federal Finance Minister Mathias Cormann has again defended the decision to float Medibank Private, after previous Coalition governments attempted the move and failed.
"It's been longstanding Coalition policy to sell Medibank Private. There's absolutely no good reason for the federal government to own a private health insurance business today."
Policy holders will receive preferential treatment in accessing shares, before the sell off proceeds to the institutional phase.
No single buyer will be allowed to own more than 15 per cent of Medibank.
Senator Cormann says the move corrects a conflict of interest, as the Commonwealth is both the regulator and the largest market participant.
"Medibank Private is already performing very well as a business but there are obviously some restrictions that come with being government-owned; and we believe in private ownership, Medibank Private will be able to perform even better."
Medibank has been quick to address concerns about staff redundancies, outsourcing jobs and changes to services.
Medibank Private Managing Director George Savvides says it will be business as usual.
"Existing members should expect the very same focus around service and managing health costs so that it's afforable for Australians to be able to consume health costs. This is a sector of 140 billion dollars a year, the health sector in Australia."
The float will be the largest sell off of a public asset since Queenland privatised its rail freight business in 2010, which was worth about $4.6 billion.
The sell off of Medibank Private is predicted to raise $4 billion dollars.
Senator Mathias Cormann says that money will be reinvested.
"The Australian taxpayer will be able to benefit from the government realising [that] the capital that is tied up in Medibank and being able to invest it for other purposes."
The prospectus for Medibank Private is due in late October.
The company is expected to be listed on the domestic stock exchange by December.
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