NZ Post to sell 45% of Kiwibank

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Forums › Finance and wealth management › NZ Post to sell 45% of Kiwibank

WyleECoyoteNZ

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#195094 6-Apr-2016 10:54

NZ Post is going to sell 45% of Kiwibank:

- 25% to the NZ Super Fund

- 20% to ACC

Kiwibank has been valued at $1.1bn

Both entities must hold the shares for at least 5 years, and if they do sell, it must be back to the crown.

Story here:

http://www.stuff.co.nz/business/78607205/nz-post-chairman-sir-michael-cullen-signals-major-announcement

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#1526819 6-Apr-2016 11:12

Must sell to the crown?

Stuff: "Kiwibank will remain 100 per cent government-owned - that is a bottom-line," Finance Minister Bill English said. "To ensure this occurs, the proposal includes a right of first refusal for the Government over any future sale of shares - which we would exercise."

The clear implication is that the way is prepared for an easy partial sale to a third party after five years.

The article itself does not state anywhere that it cannot be sold to a private entity.

afe66

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#1526823 6-Apr-2016 11:17

Which will be swiftly followed by me changing banks.

macuser

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#1526824 6-Apr-2016 11:18

Aka New Zealand tax payers 495 million dollar cash injection to NZ Post???

WyleECoyoteNZ

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#1526836 6-Apr-2016 11:20

And ACC just decreased levies on 1 April, down from 1.45 to 1.39 per $100.00...

I assume that'll go back up next year

turnin

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#1526839 6-Apr-2016 11:27

Why, what's the point ?

This is very suspicious , key was on Paul Henry just yesterday saying it wouldn't be sold.

It makes financial sense that Kiwibank probably should "be with" loss-making NZ post then they can write off more losses.

I wonder if Merril Lynch gets paid brokerage fees for this, as they did in the previous asset sales.

can anyone tell me why another govt department would buy an existing one.

It sounds to me like they are trying to remove NZ post from it, hence making it look like a profitable entity, and there is only one reason you try to make something look profitable, so you can increase its sale price

JamesL

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#1526841 6-Apr-2016 11:31

Won't it allow Kiwibank to have access to additional capital and growth options vs going no where under NZ Post?

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WyleECoyoteNZ

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#1526846 6-Apr-2016 11:41

I can understand the NZ Super Fund having a stake, if Kiwibank is profitable, then dividends paid will boost the fund.

Maybe the same scenario applies to ACC, if kiwibank is making money, ACC then can lower levies etc.

frankv

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#1526857 6-Apr-2016 12:00

turnin:

Why, what's the point ?

It makes financial sense that Kiwibank probably should "be with" loss-making NZ post then they can write off more losses.

It sounds to me like they are trying to remove NZ post from it, hence making it look like a profitable entity, and there is only one reason you try to make something look profitable, so you can increase its sale price

I think it does make sense to separate them, just as it made sense to split Telecom off from the Post Office... at the moment, KiwiBank is subsidizing the failing NZPost, and disguising NZPost's real losses.

Why it should be sold off to ACC & NZSF is unclear though. I suspect this is to avoid any finger-pointing about asset sales ("We're not selling them... just shuffling them around"). An election not far off, and asset sales was a PR disaster last time round.

Geektastic

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#1526864 6-Apr-2016 12:05

Looks like money go round to me - all the 'buyers' are ultimately the same person, the Crown!

turnin

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#1526866 6-Apr-2016 12:06

JamesL:

Won't it allow Kiwibank to have access to additional capital and growth options vs going no where under NZ Post?

Possibly , but they are separate companies anyway right

PhantomNVD

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#1526882 6-Apr-2016 12:19

But Kiwibank exists (physically located) inside NZpost, so maybe this is just ensuring their premises doesnt get sold out under them?

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JaseNZ

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#1526884 6-Apr-2016 12:23

I agree with the sale, get NZ post away from kiwi bank, this will give it a lot more room for movement in the years to come.

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#1526918 6-Apr-2016 12:39

Mspec:

I agree with the sale, get NZ post away from kiwi bank, this will give it a lot more room for movement in the years to come.

There's also the small issue of shareholder responsibility. Shareholders can be called to inject cash into a business if it is failing or is required to meet law. NZ Post continues to crash and would be in breach of it's responsibility to support kiwibank.

Doesn't matter if it's a merry go round and that 'the crown' ultimately owns it. Money and cash still have to come from somewhere, and now it's acc and the super fund, who will also benefit from dividend payments to prop their own organisations.

It's just sensible business.

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nathan

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#1526919 6-Apr-2016 12:40

sell 100% of NZ Post and TVNZ as well before they're worth nothing like Solid Energy

gzt

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#1526951 6-Apr-2016 13:08

Solid Energy followed such a bizzare strategy led by its executives it is a very odd case. Not really comparable.

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