New Zealand Post may have Crown buyers for Kiwibank

New Zealand Post may well be able to divest its stake in Kiwibank without the financial business being lost to public hands. It has received an indicative offer from the New Zealand Superannuation Fund and the Accident Compensation Corporation to buy 20% and 20% od Kiwi Group Holdings (KGH), the company that owns Kiwibank and the associated businesses such as Kiwi Wealth Management and Kiwi Insurance.

The two potential buyers are the Cown’s two major investment funds to the setup would mean that Kiwibank remains wholly owned by the government. The offer valued KGH at NZ $1.1bn that would mean New Zealand Post would receive NZ $495 million.

New Zealand Post Group Chairman Sir Michael Cullen said that “no deal has been finalised yet and it will take some weeks for a process to be worked through, however we wanted to be proactive in our disclosure”.

Sir Michael added: “New Zealand Post approached the Government and pursued the initiative because it considers that NZ Super Fund and ACC are strong potential shareholders for Kiwibank as a Crown-owned bank. The two investment funds hold assets of over $60 billion between them, while New Zealand Post continues to face headwinds in its core mail business.”

Sir Michael said New Zealand Post has provided approximately $400 million of capital to Kiwibank over its lifetime. “We believe now is the right time to broaden the bank’s support base within the wider public sector, and this provides the NZ Super Fund and ACC with a rare opportunity to secure a significant minority stake in a large and well-performing unlisted New Zealand business.”

With the money, New Zealand Post will be able to invest in its core parcels, packages and letters business and pay down some of its debts. As part of the deal, a special dividend would also be paid to the Crown.

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