Wednesday 11th January 2017
|Text too small?|
ANZ Bank New Zealand has sold UDC Finance to HNA Group for $660 million, marking the Chinese company's first foray into New Zealand.
The deal is subject to various approvals and is expected to be completed late in the second half of the year, and will deliver a net gain to ANZ of A$100 million, the lender said in a statement. The sale price is $235 million above UDC's net assets, or a price-to-book ratio of 1.6 times.
"The sale of UDC is consistent with our strategy to simplify the bank and is a good outcome for customers and staff," ANZ New Zealand chief executive David Hisco said in a statement. "HNA is well placed to invest in specialist asset finance products and systems which will help UDC expand further in the future."
The finance company's ownership has been up in the air for almost a year, attracting suitors including NZX-listed Heartland Bank, though HNA emerged as the front-runner in December. ANZ's review of the ownership triggered Standard & Poor's to downgrade UDC's credit rating to A- from AA- and that question mark made it more difficult for the finance company to attract debenture funding.
Hainan, China-based HNA, which evolved from a regional airline to a global conglomerate with more than US$90 billion of assets, plans to preserve UDC's existing operations, keeping all staff and customers.
HNA vice chairman and chief executive Adam Tan said the Auckland-based non-deposit taker provides "significant growth opportunities in Australasia and supports HNA Group's disciplined approach to our core tourism, logistics and financial services businesses."
UDC holds the highest credit rating among its deposit-taking peers, with Liberty the only other NBDT with an investment grade rating at BBB. UDC is currently offering 3.6 percent for a 12-month term deposit, sitting in the middle of the pack among other finance companies. However, longer duration terms are largely lower than UDC's peers.
The lender's debenture funding shrank to $1.59 billion as at Sept. 30 from $1.74 billion a year earlier, reducing its share of deposits among finance companies to 57 percent from 61 percent a year earlier. At the same time, UDC's loan book expanded 9.6 percent to $2.57 billion, helping generate a record profit of $58.3 million.
No comments yet
MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite