Curtain falls on $300m government capital facility established for use in emergency by Kiwibank

The long running $300 million government capital facility established for possible use by Kiwibank in an emergency has been closed.

In a brief statement Geoff Martin, Kiwibank Head of Funding, says the $300 million uncalled capital facility from the Crown to Kiwibank's parent company, Kiwi Group Holdings Ltd, for the benefit of Kiwibank has been terminated.

"Changes in Kiwibank’s ownership structure since the facility was established in 2009, together with increases to Kiwibank’s capital ratios and balance sheet size, make this facility no longer necessary," says Martin.

The facility has never been used.

When the facility was unveiled Finance Minister Bill English and State Owned Enterprises Minister Simon Power said the move followed a request from NZ Post, Kiwibank's sole owner at the time, for support to help maintain its AA- credit rating and allow Kiwibank to continue a growth-focused business plan.

However, the actual size of the facility didn't emerge until NZ Post's financial statements for the June 2011 year were released. These disclosed that the facility, on commercial terms which could be drawn in response to a "significant unforeseen event," was worth $300 million.

In 2016 the NZ Super Fund bought a 25% stake in Kiwi Group Holdings for $263 million, with the Accident Compensation Corporation paying $231 million for a 22% stake. NZ Post retained a 53% stake. The deal valued Kiwi Group Holdings at $1.050 billion. 

Further ownership change may be afoot with a spokeswoman for Finance Minister Grant Robertson saying in February that: "Since 31 October 2021, any shares offered by any Kiwi Group Holdings shareholder and not taken up by other existing Kiwi Group Holdings shareholders would be available for the Crown to purchase directly. Ministers and officials are currently considering the best ways for the Crown to express its ownership interest."