The newly named Z Energy, formerly Greenstone Energy and operator of the country's more than 200 petrol stations that used to carry the Shell name, says it's planning a second retail bond issue.
In a brief statement Z Energy chief executive Mike Bennetts said no final decision had yet been made.
"Any issue would likely be on similar terms to the issue of secured bonds undertaken in 2010, with bondholders sharing the same security as Z's banks, on an equal ranking basis," Bennetts said.
"At this stage, no decision had been taken as to the size of any future issue, or other terms of the bonds."
Z Energy is owned by Wellington-based infrastructure investor Infratil and the New Zealand Superannuation Fund. The two bought the business, formerly global oil giant Shell's New Zealand downstream operations (or fuel retail and distribution business), for NZ$696.5 million in April last year.
The business consists of a 17.1% stake in Marsden Point oil refinery operator the New Zealand Refining Company, a 25 % stake in Loyalty New Zealand which runs Fly Buys, some 220 petrol stations, about 100 truck stops, plus pipelines, terminals and bulk storage terminal infrastructure around the country.
In its annual results earlier this week Infratil said its 50% stake in Z Energy, which cost NZ$210 million, contributed an "exceptional reported return" of NZ$116 million comprising NZ$55 million of earnings and NZ$61 million through asset revaluations. On a current cost of supply basis Z Energy’s earnings before interest, tax, depreciation, amortisation and financial instruments was NZ$20 million higher than achieved in its last year of Shell ownership, notwithstanding transition costs and the disruption resulting from the February Christchurch earthquake, Infratil added.
"More importantly the Z Energy team has developed a comprehensive strategy to grow the business through investment in its distribution, logistics, and marketing capability," Infratil said.
A previous issue from Z Energy, then Greenstone Energy, raised NZ$147 million through a six year retail bond issue to about 3,500 investors' last year paying annual interest of 7.35%. Proceeds from that offer were used to repay some of Greenstone's NZ$350 million worth of bank debt held by ANZ, BNZ, HSBC and Westpac. See the last bond holders report here.
Both Infratil and the Super Fund coughed up NZ$210 million to buy the Shell business with the balance of the price - NZ$285 million - funded with bank debt.
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