NZ Post reaches agreement to sell large stake in Kiwibank to ACC and NZ Super

Thursday, 15 September 2016

Chairman of NZ Post Sir Michael Cullen makes an announcement on the ownership of Kiwibank.

Terms of the partial sale of Kiwibank from NZ Post to ACC and the NZ Super Fund have been agreed.

But key aspects of the deal appear to have changed.

New Zealand Post has bundled the bank, wealth management and insurance businesses, in to the Kiwi Group, which the deal values at $1.1 billion.

In April, the state-owned postal company announced it was looking to sell up to 45 per cent of the bank - a wholly owned subsidiary - to the two publicly owned fund managers.

At the time the stake was valued at $495 million, although the figure was not mention in the latest update.

The stake being offered for sale is now simply being referred to as 'a significant minority' and a spokesman of NZ Post said it was not 'safe to assume' that key details around the stake and price were still the same.

* Kiwibank's partial sale a reshuffle, designed to solve NZ Post's struggles

* NZ Post blames paperwork for delaying partial sale of Kiwibank

* New Zealand Post deletes 'it's a Kiwi thing' tweet after conversation turns 'heavy'**

As well as releasing much needed cash to the NZ Post, the deal would give greater scope for cash injections into Kiwibank.

On Thursday NZ Post chief executive Brian Roche confirmed the organisation had reached key commercial terms.

When the transaction was announced, NZ Post said it expected to agree commercial terms in June. It has since blamed the delay on the 'scale of the transaction'.

'Following a period of due diligence, the parties can confirm an application for approval has been lodged with the Reserve Bank,' Mr Roche said.

'Transaction documents are now being completed and by the time the Reserve Bank has made a decision, the parties will be in a position to release details to the market.'

The Reserve Bank must approve major changes in bank ownership.

'The sale was proposed – conditional on Kiwibank remaining 100 per cent in public ownership – as a means to provide Kiwibank with access to additional sources of capital and investment expertise to support the next stages of its growth, and for NZ Super Fund and ACC to gain a significant minority stake in a large and well‐performing unlisted New Zealand business,' Roche said.

NZ Post has said it will use the proceeds to pay off debt and pay a special dividend to the Government.