UPDATE: Infratil Consortium Executed Sale, Purchase Agreement For Shell New Zealand Assets
28 Marzo 2010 - 5:36PM
Noticias Dow Jones
Utilities and airport investor Infratil Ltd. (IFT.NZ) and the
New Zealand Superannuation Fund said Monday they have executed a
sale and purchase agreement for Shell New Zealand's distribution
and retail business that includes a 17.1% stake in the New Zealand
Refining Company (NZR.NZ).
The base purchase price is NZ$696.5 million plus an adjustment
for actual net working capital in excess of NZ$208 million on the
April 1 settlement date. The purchase remains conditional on
funding and regulatory approval, the company said in a statement.
Shell New Zealand is a unit of Royal Dutch Shell PLC (RDSA).
Infratil senior executive Tim Brown said the adjustment for
actual net working capital will depend on fuel, payables and
receivables in place on April 1.
There is also an NZ$13.5 million advance license royalty payment
for brand.
Total equity provided by Infratil and the NZ Superannuation fund
will amount to NZ$420 million, with the balance of the purchase to
be bank funded, it said. Infratil and NZ Superannuation fund will
each provide NZ$210 million. The stake in NZ Refining has an
approximate market value of NZ$190 million, Infratil said.
Along with the stake in NZ Refining, the purchase also includes
New Zealand-wide distribution, storage, marine and aviation assets,
the rights to use the Shell retail brand, a 25% share in Loyalty
New Zealand and the ongoing supply of Shell fuels and products.
There are currently 229 service stations and 95 truck stops
nationwide. The deal does not include any of Shell's upstream
activities in the country.
The Shell NZ assets will represent some 10% of Infratil's
assets, Infratil Chief Executive Marko Bogoievski told analysts in
a conference call. Infratil's main asset is an 50.5% stake in
Energy company TrustPower Ltd. (TPW.NZ) which will represent 48% of
its assets after the Shell NZ purchase.
"The businesses being acquired have been built up by Shell over
almost a century and their decision to sell due to changes in the
global oil market has presented a 'once in a generation'
opportunity," said Bogoievski.
Brown said if the Shell business were to have a similar result
in the current financial year as it did in the previous year, the
purchase would add around NZ 6 cents a share to Infratil. According
to Infratil, Shell reported "current cost" earnings before
interest, taxes, depreciation and amortization of NZ$138 million in
the year to Dec. 31. Its reported earnings before interest and tax
were NZ$157 million.
Bogoievski declined to give any specific guidance until the
consortium is in the "driver's seat" but he said that the current
level of performance of the Shell business "is a reasonable
expectation of where we think this business is at."
Infratil stock gained on the news and was trading up 1.8%, at
NZ$1.68 at 2240 GMT, while the benchmark NZX-50 was up 0.2%.
"It looks like a good deal, they seem to have bought it cheaply
on an Ebitda ratio," said ASB Securities broker Stephen Wright. He
said it would take some time, however, for the impact to translate
into earnings.
The consortium and Shell NZ entered exclusive negotiations last
November after Shell New Zealand said it was conducting a review of
its downstream business as part of a strategic review of its global
businesses.
-By Rebecca Howard, Dow Jones Newswires; 64-4-471-5990;
rebecca.howard@dowjones.com
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