Infratil and the New Zealand Superannuation Fund have announced they are considering selling 40-60% of Z Energy in a stock market flotation in the third quarter of 2013.
They bought Shell NZ's assets from Shell almost 3 years ago and rebranded it as Z Energy.
“At the time of purchase Z Energy had the challenge of transitioning off the Shell global platform, new capital investment priorities and the challenge of executing a countrywide rebranding,” said Infratil CEO Marko Bogoievski.
“Now, nearly three years on, these have been met, and Z Energy has strong cash-flows, a good dividend outlook and growth options, which would suit a wider investor audience.”
NZ Super Fund spokesman Matt Whineray said a listing would be beneficial for the New Zealand capital markets.
“The Fund’s investment in Z Energy has performed well, with the asset benefiting from increased capital investment, strong branding and a focus on customer service,” Whineray said.
“As a result, Z Energy now represents a larger proportion of the Fund than it did at the time of purchase, and a partial listing appeals to us as a way of diversifying our investment portfolio," he said.
As at 31 January 2013, Z Energy was the $21 billion Fund’s second-largest New Zealand investment, making up 2.4% of the total Fund.
Infratil and NZ Super Fund said that while no final decisions have been made, they would be likely to retain stakes in the company of between 20% and 30% each.
Z Energy CEO said the listing would provide an opportunity for Z’s customers, bondholders and members of the New Zealand investing public to buy part of a significant Kiwi business.
Z Energy said it supplied around 30% of New Zealand’s fuel and owned 17.1% of Refining NZ, which runs New Zealand’s only fuel refinery at Marsden Point.
It also owns 25% of Loyalty New Zealand which runs Fly Buys. Z Energy also owns over 200 service stations, 90 truck stops, pipelines, terminals and bulk storage terminals around the country.
Z Energy supplied fuel to retail and commercial customers, including airlines, trucking companies, mines, shipping companies and vehicle fleet operators. It also sold bitumen to roading contractors and manufactured ingredients used in detergents and other household products.
(Updated with details and background)