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Infratil and NZ Super Fund say planning possible float of 40-60% of Z Energy on NZX in third quarter of 2013

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Infratil and NZ Super Fund say planning possible float of 40-60% of Z Energy on NZX in third quarter of 2013
8th Mar 13, 9:03am by Bernard Hickey

Infratil and the New Zealand Superannuation Fund have announced they are considering selling 40-60% of Z Energy in a stock market flotation in the third quarter of 2013.

They bought Shell NZ's assets from Shell almost 3 years ago and rebranded it as Z Energy.

“At the time of purchase Z Energy had the challenge of transitioning off the Shell global platform, new capital investment priorities and the challenge of executing a countrywide rebranding,” said Infratil CEO Marko Bogoievski.

“Now, nearly three years on, these have been met, and Z Energy has strong cash-flows, a good dividend outlook and growth options, which would suit a wider investor audience.”

NZ Super Fund spokesman Matt Whineray said a listing would be beneficial for the New Zealand capital markets.

“The Fund’s investment in Z Energy has performed well, with the asset benefiting from increased capital investment, strong branding and a focus on customer service,” Whineray said.

“As a result, Z Energy now represents a larger proportion of the Fund than it did at the time of purchase, and a partial listing appeals to us as a way of diversifying our investment portfolio," he said.

As at 31 January 2013, Z Energy was the $21 billion Fund’s second-largest New Zealand investment, making up 2.4% of the total Fund.

Infratil and NZ Super Fund said that while no final decisions have been made, they would be likely to retain stakes in the company of between 20% and 30% each.

Z Energy CEO said the listing would provide an opportunity for Z’s customers, bondholders and members of the New Zealand investing public to buy part of a significant Kiwi business.

Z Energy said it supplied around 30% of New Zealand’s fuel and owned 17.1% of Refining NZ, which runs New Zealand’s only fuel refinery at Marsden Point.

It also owns 25% of Loyalty New Zealand which runs Fly Buys. Z Energy also owns over 200 service stations, 90 truck stops, pipelines, terminals and bulk storage terminals around the country.

Z Energy supplied fuel to retail and commercial customers, including airlines, trucking companies, mines, shipping companies and vehicle fleet operators. It also sold bitumen to roading contractors and manufactured ingredients used in detergents and other household products.

(Updated with details and background)

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6 Comments

by  steven  |  8th Mar 13, 9:13am 1362687189

Oh right having finally cotton'd on to the fact they paid Shell too much for a shrinking industry they now want to offload to mom and pops.

Going to be interesting...

regards

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by  Bernard Hickey  |  8th Mar 13, 9:38am 1362688711

Steven

I wouldn't be so sure Infratil and NZ Super fund overpaid. Here's what NZ Super Fund say:

" Z Energy now represents a larger proportion of the Fund than it did at the time of purchase, and a partial listing appeals to us as a way of diversifying our investment portfolio"

That suggests the value has risen a lot, given the Fund has also increased in value over that time.

cheers

Bernard

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by  Stephen Hulme  |  8th Mar 13, 11:36am 1362695796

NZ Super Fund spokesman Matt Whineray said a listing would be beneficial for the New Zealand capital markets.

 

Since when did the NZ Super Fund adopt a mandate to support the privately owned NZ capital markets - altruism to the point of insanity or spin to justify unloading upon the unsuspecting?

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by  Waripori  |  8th Mar 13, 11:57am 1362697042

I doubt Infratil and Super Fund paid Shell too much. There was no other buyer willing to take over the assets and disentangle the enterprise from its multi national parent so the price was probably attractive. They now have a track record and if they do intend to float it ,will be able to publish some accounts and provide an indication of what dividends can be expected.

 

May not be much growth in the share price but it should be a reasonable utility type share a bit like the power companies. Presumably the existing shareholders will be able to extract a profit from buying the assets cheaply and repackaging them which they can then use to invest in something else with more growth potential.

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by  Waripori  |  8th Mar 13, 11:59am 1362697164

I doubt Infratil and Super Fund paid Shell too much. There was no other buyer willing to take over the assets and disentangle the enterprise from its multi national parent so the price was probably attractive. They now have a track record and if they do intend to float it ,will be able to publish some accounts and provide an indication of what dividends can be expected.

 

May not be much growth in the share price but it should be a reasonable utility type share a bit like the power companies. Presumably the existing shareholders will be able to extract a profit from buying the assets cheaply and repackaging them which they can then use to invest in something else with more growth potential.

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by  Waripori  |  8th Mar 13, 12:02pm 1362697351

I doubt Infratil and Super Fund paid Shell too much. There was no other buyer willing to take over the assets and disentangle the enterprise from its multi national parent so the price was probably attractive. They now have a track record and if they do intend to float it ,will be able to publish some accounts and provide an indication of what dividends can be expected.

 

May not be much growth in the share price but it should be a reasonable utility type share a bit like the power companies. Presumably the existing shareholders will be able to extract a profit from buying the assets cheaply and repackaging them which they can then use to invest in something else with more growth potential.

Up
0