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Infratil and Guardians of NZ Superannuation Agree the Purchase of Shell NZ Downstream Assets
29 Mar 2010
A consortium owned 50% by Infratil Limited and 50% by the Guardians of New Zealand Superannuation today announced it had executed a sale and purchase agreement for the acquisition of Shell New Zealand’s distribution and retail businesses and 17.1% interest in the New Zealand Refining Company. The agreement is scheduled to complete on April 1, 2010. The agreement remains conditional on the drawdown of bank facilities (the relevant bank facilities agreement has been signed) and finalising certain third party consents.
The base purchase price is $696.5 million plus an adjustment for actual net working capital in excess of $208 million at settlement date. Normal net working capital levels are estimated to average $250 million during a 12 month period.
In addition to an extensive retail network and commercial customer base, the acquisition includes NZ-wide distribution, storage, marine and aviation assets; the rights to use the Shell retail brand; a 25% share in Loyalty New Zealand (Fly Buys); and the ongoing supply of Shell fuels and products.
Total equity provided by Infratil and the NZ Superannuation Fund will amount to $420 million with the balance of the purchase consideration bank funded. The banks are also providing a working capital facility to accommodate the fluctuating inventory of the business.
This transaction has taken almost a year to conclude and follows very extensive due diligence. A comprehensive transition plan has been developed to ensure the business continues to reliably provide excellent products and services to New Zealand motorists and commercial customers. It will trade under the name of Greenstone Energy Limited.
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 Marko Bogoievski, CEO and Managing Director, Infratil.
“The goal from here is to continue to provide high-quality fuels at competitive prices and to leverage the benefits of a New Zealand owned and managed downstream business”.
Over the last year Infratil has divested approximately $400 million of assets and with this transaction, will have invested over $400 million in new assets. The transactions leave Infratil with a more focused portfolio of investments that is well placed to generate good returns for its shareholders on both a short term and longer term basis.
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