Prime Minister John Key indicated yesterday the Government was planning to sell minority stakes in Mighty River Power, Meridian, Genesis and Solid Energy.
On the latest figures available, the Government could raise between $2.4 billion and $4.8 billion by selling between 25% and 49% of the energy companies to New Zealand investors.
The Government was also seeking advice from Treasury about reducing its stake in Air New Zealand.
"I see a strong appetite from New Zealand investors for participation in a mixed ownership model," Mr Key said in his "state of the nation" address.
"Between KiwiSaver, other managed funds, iwi, mum and dad investors and the Government's own investment arms - including the super fund - there is a very substantial capacity to invest in quality New Zealand assets."
The Government envisaged those groups being at the front of the queue and taking the majority of any stake offered, he said.
In particular, it would be great if Kiwi "mums and dads" had more of a stake in the New Zealand economy by owning shares in good Kiwi companies.
Mr Key believed that would be progress towards building a better savings and investment culture in New Zealand.
Craigs Investment Partners broker Chris Timms said the Government could retain control of the company in selling anywhere between 25% and 49%, depending on the level of control it wanted.
The 25% sale would allow it full control while the 49% sale could mean some loss of board control.
Forsyth Barr broker Peter Young said the partial float of the companies would be positive for the New Zealand stockmarket, as there had not been many large, blue chip equity IPOs (initial public offerings) in the past few years.
"I would think that the companies mentioned would be well sought after by both institutional and retail investors.
"It would be good for Air NZ. If the Government sold down part of its holdings, it would greatly increase the `free float' of shares on the market and make the stock more liquid," Mr Young said.
Mr Timms said there were precedents for ensuring the shares went to New Zealanders in a partial float.
When Contact Energy was first sold to private investors, demand was so high that scaling occurred and every applicant got 806 shares, he said.
The Government could accept applications only from investors with New Zealand addresses, or define who it would allocate stock to, he said.
Mr Key said ownership by New Zealand investors would be on top of the Government's majority stake, which was held on behalf of all New Zealanders.
That majority stake would always ensure New Zealand control for the benefit of New Zealanders.
The final policy would be decided before this year's election and National would seek a mandate from the electorate before going ahead, he said.
Business New Zealand chief executive Phil O'Reilly said allowing New Zealanders to invest directly in a changed mix of state-owned assets was a policy that was both progressive and moderate.
Broadening the pool of investment opportunities for New Zealand families was a key step towards a more vibrant economy, he said.
"Greater involvement by more stakeholders also fosters accountability and better performance."
The timeframe and tests for advancing the policy were measured and gave a good amount of time for public discussion of the options, he said.
