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Infratil, Superfund complete Shell purchase

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, March 29 NZPA - A consortium owned 50 percent by infrastructure investor Infratil and 50 percent by the Guardians of New Zealand Superannuation has finalised the purchase of Shell New Zealand's distribution and retail businesses and a 17.1 percent interest in the New Zealand Refining Co.

The agreement is scheduled to be completed on Thursday, and remained conditional on the drawdown of bank facilities, which have been signed, and finalising certain third party consents, Infratil said today.

The base purchase price is $696.5 million plus an adjustment for actual net working capital in excess of $208m at settlement date. Normal net working capital levels are estimated to average $250m during a 12-month period.

In addition to an extensive retail network and commercial customer base, the acquisition included New Zealand-wide distribution, storage, marine and aviation assets; the rights to use the Shell retail brand; a 25 percent 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 $420m 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.

The transaction had taken almost a year to conclude and followed extensive due diligence, Infratil said.

A comprehensive transition plan had been developed and the business would trade under the name of Greenstone Energy.

The businesses being bought had been built up by Shell over almost a century and its decision to sell due to changes in the global oil market had presented a "once in a generation" opportunity, Infratil managing director Marko Bogoievski said.

"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."

During the past year Infratil had divested about $400m of assets, and with this transaction would have invested over $400m in new assets.

The transactions left Infratil with a more focused portfolio of investments, Mr Bogoievski said.

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