NZ Post selling part of Kiwibank

NZ Post Chairman Michael Cullen announced today that NZ Post wants to sell 45% of Kiwibank. That’s a similar proportion to the part asset sales of the power companies in the last term.

Stuff: NZ Post to sell 45 per cent of Kiwibank for $495m cash injection

Troubled state-owned New Zealand Post is selling 45 per cent of Kiwibank, 25 per cent to the New Zealand Super Fund and 20 per cent to ACC.

The deal values Kiwibank at $1.1 billion, NZ Post chairman Sir Michael Cullen said. Both entities are owned by the New Zealand government.

If the sale goes ahead, NZ Post will receive $495 million for its stake.

So that’s still public ownership but with shares being sold to investors the Super Fund and ACC.

John Key is in favour.

Prime Minister John Key said it was good solution

Key rejected suggestions it was a compromise to get around the Government’s opposition to further selling off of state assets.

Labour seems to be backing it too:

Labour leader Andrew Little said it was important Kiwibank stayed in public ownership.

“And this does that, there are some good conditions around it,” he said.

“This provides a way to get extra capital from these sovereign wealth funds, and hopefully for NZ Post to use the funds that they raise from the sale, to put more capital into Kiwibank.

Meanwhile, Labour Party state-owned enterprise spokesman David Parker said Cullen should be congratulated on the idea.

“Michael Cullen should be congratulated for securing a route to expand KiwiBank and keep it in public ownership, given the refusal of National to provide more capital for NZ Post or KiwiBank.

Greens have more concerns:

Green Party co-leader James Shaw said the move opened the door to partial privatisation.

“This deal makes it harder for the Government to use Kiwibank to drive competition in the banking sector, as the Green Party announced we’d do, because the Government can’t direct the Super and ACC funds in the way it could have directed Kiwibank,” he said.

“The fact is the Government forced Kiwibank’s hand and today’s announcement will make it easier than it was before to move Kiwibank into private ownership.”

But Cullen…

…said Shaw’s argument, that the Government was able to direct Kiwibank, was “completely incorrect”

“Kiwibank is a 100 per cent owned subsidiary of New Zealand Post but in terms of the Companies Act and Reserve Bank requirements it must act independently in terms of its activities.

“The Government cannot direct New Zealand Post, nor through New Zealand Post can it direct Kiwibank.”

And the person who made Kiwibank happen, Jim Anderton via Newshub:

Founder of Kiwibank, Jim Anderton believes the move to sell 45% of New Zealand Post shares in Kiwibank was the best option available.

So part from the Greens it looks like there will be little opposition.

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9 Comments

  1. Zedd

     /  6th April 2016

    The cynical Zedd.. would say “based on ‘team keys’ current, predictable record.. it will be ‘on the block’ & sold to the highest bidder.. before next election !” 😦

    BUT we shall see ?

    Reply
    • Dougal

       /  7th April 2016

      Where is the apoplectic outrage that it was Michael Cullen’s idea? Or is this something you have conveniently overlooked?

      Reply
  2. Ratty

     /  6th April 2016

    Good post… Nice to see the ‘business’ side of selling this rather than the politics

    Reply
  3. Kevin

     /  6th April 2016

    So in an indirect way the taxpayer is being forced to bail out NZ Post.

    Reply
  4. Brown

     /  7th April 2016

    This is just shuffling money around and helps no one in the long term. Kiwibank is a pointless exercise in socialism that achieves nothing useful except in slogan creation. Its Trougher Anderton’s best work.

    NZ Post have areas where they could grow parts of the business (there are some higher tech areas they have fingers in) but the management lack any vision (typical really) and have lumped everything into a one size fits all approach. Having done nothing useful at NZ Post Roache will just move onto bigger disasters within the civil service as a reward for a job done poorly.

    Reply
    • Kevin

       /  7th April 2016

      “This is just shuffling money around and helps no one in the long term. Kiwibank is a pointless exercise in socialism that achieves nothing useful except in slogan creation. Its Trougher Anderton’s best work.”

      Pretty much. And guess where the money is ultimately coming from – yep, the taxpayer. Also unbelievable that New Zealand Super Fund is investing in NZ Post. I thought NZSF is supposed to be about making smart safe investments with good returns, like, you know, investing in petrol stations that sell crappy pies etc. .

      Reply
      • Brown

         /  7th April 2016

        Its politics – the super fund and ACC are doing what they are told. If a choice was available I suspect both would say no to the idea.

        Reply
        • Kevin

           /  7th April 2016

          Which makes me wonder why when the super fund was created it wasn’t created in such a way that it was protected from such political interference.

          Political interference has all but destroyed ACC, at least with regards to what it was intended to be.

          Reply

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