Sharechat Logo

Infratil to help finance sale of NZ Bus to private equity for up to $240M

Monday 24th December 2018

Text too small?

Infratil has agreed to sell its NZ Bus unit to Next Capital for up to $240 million, but will help the Australian private equity firm pay for it. 

Announced after the New Zealand market had closed, Infratil said it's reached a conditional sale with Next Capital, which sold Go Bus to Ngai Tahu Holdings and Tainui Group Holdings four years ago. The New Zealand firm expects to receive between $218 million and $240 million from the sale, with the final proceeds adjusted for working capital, capital spending, net debt and an earnout. 

Infratil will also provide vendor finance of between $20 million and $30 million repayable over five and a half years. 

The deal needs counterparty consents, Overseas Investment Office approval, and the vendor loan to be fully documented. 

"The conditional sale agreement enables NZ Bus to continue to grow its business and people under new ownership and allows Infratil to focus its investments on its established platforms and targeting renewable energy, retirement services, and growth in data and connectivity," Morrison & Co executive and NZ Bus chair Kevin Baker said in a statement to the ASX. 

Infratil has been reviewing its 13-year ownership of NZ Bus since February after negotiations with Auckland and Wellington councils ended in smaller contracts with the local authorities. The 20 Auckland contracts were valued at $1 billion with an average tenure of nine years, while the five Wellington contracts were worth $323 million, with an average 10.8-year term. 

Next Capital briefly owned New Zealand's Go Bus business between 2012 and 2014 before selling it to the nation's two biggest iwi corporate entities for a reported $170 million. 

"Next Capital considers the bus industry provides the core public service transport function in New Zealand's dynamic metropolitan environments and is excited about its re-entry into this important sector, following prior successful investments in GoBus in NZ and Forest Coach Lines in Australia," partners John White and James Murphy said. 

Infratil's shares were unchanged at A$3.60 on the ASX. They rose 0.1 percent on the NZX to $3.58, before the announcement was made. 

(BusinessDesk)

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar mixed after RBA says its ready to cut rate if necessary
OMV granted marine discharge consent for Great South Basin
More detail needed on migrant worker policy, big employer says
Briscoe Group says outlook uncertain
FMA, RBNZ disappointed by life insurers' response; $1.4m of issues found
Steep rate cut may have spooked households - Westpac
Veteran media exec Joan Withers joins Sky TV board
Contact hires Refining NZ CEO to replace Barnes
17th September 2019 Morning Report
NZ dollar weaker after Trump authorises use of emergency crude stockpile

IRG See IRG research reports