The NZ Super Fund and ACC have agreed on the commercial terms under which they will acquire a chunk of Kiwi Group Holdings, the sole shareholder in Kiwibank, from NZ Post.

The stake had been provisionally priced at $495 million and reported at 45% in earlier updates on the deal. But the sale price was not mentioned in the most recent update confirming the terms agreement, and was only referred to as a significant minority.

An application has been made to the Reserve Bank for clearance.
NZ Post would use the proceeds to pay down debt, pay a dividend to the Government and build up its parcel-delivery business. It has been dealing with a steady decline in mail volumes, putting the business under pressure. It said Kiwibank would also end up with better-resourced owners. The NZ Super Fund and ACC, the Crown’s two major investment funds, made an offer in April to purchase significant minority stakes in KGH from New Zealand Post.

NZ Post chief executive Brian Roche said once the Reserve Bank had made a decision, the full details would be released to the market, including a decision on the future of the New Zealand post guarantee of Kiwibank’s payment obligations. The sale was proposed – conditional on Kiwibank remaining 100% in public ownership – as a means to provide Kiwibank with access to additional sources of capital and investment expertise to support the next stages of its growth, and for NZ Super Fund and ACC to gain a significant minority stake in a large and well-performing unlisted New Zealand business.