Parties agree key commercial terms for combined Crown ownership of Kiwibank
New Zealand Post has agreed the key commercial terms with the New Zealand Superannuation Fund and the Accident Compensation Corporation (ACC) to become joint owners of Kiwi Group Holdings (KGH) Limited*, New Zealand Post chief executive Brian Roche said today.
The NZ Super Fund and ACC, the Crown’s two major investment funds, made an offer in April to purchase significant minority stakes in KGH from New Zealand Post.
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. This includes a decision on the future of the New Zealand Post guarantee of Kiwibank’s payment obligations, Mr Roche said.
The sale was proposed – conditional on Kiwibank remaining 100% 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.
If approved by the Reserve Bank, New Zealand Post will be able to release cash to pay down debt, pay a special dividend to the Government and increase its focus on the parcels side of the business.
*Kiwi Group Holdings Limited is the holding company of Kiwibank Limited, Kiwi Wealth Management (formerly GMI), The New Zealand Home Loan Company Limited, Kiwi Insurance Limited and Kiwi Capital Funding Limited.
**Any significant change of bank ownership must be approved by the Reserve Bank.