Archive | Infratil

Infratil considers $250 million of bond offers

Infratil Ltd is considering making a new offer of unsecured unsubordinated bonds in 2 separate series in December, the first a 6-year bond and the second a 10-year bond.

Infratil treasurer Fiona Cameron said on Monday the company expected to set the interest rate on the 10-year (2028) bonds for 5 years, then reset the rate in 2023.

The company will seek an aggregate $125 million plus the same sum in oversubscriptions – total $250 million.

Infratil has $111 million of bonds maturing on 15 November, and NZ-resident holders of those bonds will be able to exchange maturing bonds for new ones, subject to availability.

The shorter of the new bonds will mature on 15 December 2024 and the second on 15 December 2028.

Infratil expects to release full details of the offer, and to open it, next week.

Attribution: Company release.

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Infratil enters student residence deal in Canberra

The Australian National University in Canberra awarded Infratil Ltd & the Commonwealth Superannuation Corp a 30-year concession on Wednesday for the net rental revenue from 9 on-campus purpose-built student accommodation residences, comprising about 3760 beds. The contract includes a 500-bed student residence that’s under construction (pictured).

Infratil said its 50% equity investment, settled yesterday, would cost it $A82.5 million, which the university will use to repay debt, help fund the proposed redevelopment of the Union Court open space and improve student services.

The concession includes responsibility for the provision of “hard” facilities management services such as building maintenance & lifecycle replacement, which the investors have sub-contracted to Spotless Group Holdings Ltd. HRL Morrison & Co Ltd will manage the investment. The university retains building ownership & responsibility for the delivery of “soft” facilities maintenance services, such as marketing & managing applications for the accommodation, processing rental agreements, cleaning internal areas & providing day-to-day pastoral care to residents.

Infratil chief executive Marko Bogoievski said the Australian National University portfolio stood out in the on-campus purpose-built student accommodation (PBSA) sector in Australia in terms of both scale & quality: “PBSA is an emerging asset class supported by strong domestic & international demand growth for quality tertiary education. The concession agreement provides the consortium with a stable, long-term inflation-linked cashflow and rights & protections regarding the development of additional on-campus PBSA residences.”

Vice-chancellor Professor Brian Schmidt said the agreement would enable the university to upgrade its student accommodation and help it meet the strong demand.

The arrangement follows a review of student accommodation and a survey of 4800 residential students in 2015, which found a pressing need to upgrade existing facilities and build more student accommodation.

5000 students live in student accommodation, but about 1500 more were unable to find university accommodation this year. The investment & management agreement follows the announcement by philanthropists Graham & Louise Tuckwell of plans to build 2 new halls of residence for 800 students.

Attribution: Company & university releases.

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Super fund sells down and Infratil sells out of Z Energy

Z Energy Ltd shares went into a trading halt overnight pending completion of a bookbuild for Infratil Ltd to sell its whole 20% of the company and the NZ Superannuation Fund to sell 9.725%.

The indicative price range for the bookbuild was set at $6-6.20/share, down from Tuesday’s closing price of $6.63. The institutional bookbuild will close at 4pm this Wednesday, 30 September.

Infratil & the fund entered a 50:50 partnership in 2010 to buy the downstream assets business of Shell NZ, which became Z Energy, and 17.1% of The NZ Refining Co Ltd for a base purchase price of $696.5 million, plus an adjustment for actual net working capital in excess of $208 million at settlement date.

The 2 partners recouped $840 million when they listed Z Energy in 2013, selling 60% of it at $3.50/share.

Infratil will collect $480-496 million for its remaining 80 million shares, depending on the bookbuild price, and the super fund $233.4-241.2 million from its sale of 38.9 million shares.

The Guardians of NZ Superannuation’s chief investment officer, Matt Whineray, said today the fund would retain a stake of more than 10% in the company, reflecting the Guardians’ confidence in Z Energy’s business strategy & management team.

Mr Whineray said: “The current market environment provides an opportunity to reduce the fund’s large overweight position in Z Energy and realise further value from what has been a highly successful investment. We look forward to continuing our relationship with Z Energy through the retention of our significant minority stake.”

Attribution: Company & fund releases.

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Propbd on Q W20May15 – Warehouse bonds, Infratil result

Warehouse completes bond bookbuild and sets interest rate
Infratil lifts earnings and prepares for more growth

Warehouse completes bond bookbuild and sets interest rate

The Warehouse Group Ltd’s issue of unsecured, unsubordinated, fixed rate bonds has been oversubscribed. It’s reserved $100 million for clients of participants in the bookbuild process who have received firm allocations in the general offer, including $25 million of oversubscriptions.

The general offer opens today and is scheduled to close on Wednesday 10 June.

The exchange offer to holders of maturing bonds resident in New Zealand, which is for up to $25 million, opens today and is scheduled to close on Friday 5 June. There will be no public pool.

The interest rate has been set at 5.30%/year.

Infratil lifts earnings and prepares for more growth

Infratil Ltd said yesterday the company had succeeded in creating value for its shareholders “by any measure” in the March 2015 year. More importantly, it had also positioned itself to continue doing so.

Net parent surplus was up from $199 million to $384 million. The adjusted net surplus (excluding revaluations, realisations, one-off acquisition costs and reflecting Z Energy’s contribution on a current cost basis) was up from $39 million to $79 million.

Consolidated EBITDAF from continuing operations was up 4%, from $437 million to $453 million. Adjusted consolidated EBITDAF was up 7%, from $493 million to $526 million.

EBITDAF is a non-GAAP measure which shows management’s view of underlying business performance. It shows operating earnings before interest, tax, depreciation and amortisation and before making any adjustments for fair value movements, realisations and impairments. Adjusted EBITDAF includes discontinued operations and Z Energy’s contribution on a current cost basis, but excludes one off acquisition costs relating to RetireAustralia.

Investments totalled $508 million ($616 million), including the $219 million acquisition of a 50% interest in RetireAustralia in December 2014, Trustpower’s $200 million of investment mainly in Australian generation, $32 million invested via ASIP in Australian social infrastructure and $57 million of investment by New Zealand subsidiaries in their own activities.

The final dividend for the year is 8c/share (fully imputed) and a special dividend of 6.4c/share (fully imputed) will also be paid, both on 15 June.

Infratil has forecast EBITDAF to increase by 7-14% in the new financial year, due largely to past investment.

Link: Result details

Attribution: Company releases.

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Infratil & NZ Super Fund enter new JV to buy RetireAustralia

Infratil Ltd and the NZ Superannuation Fund have entered into another 50:50 joint venture, this one to buy Australia’s largest privately owned retirement village owner & operator, RetireAustralia.

Infratil and the Super Fund bought Z Energy Ltd – Shell NZ Ltd’s distribution & retail businesses and 17.1% interest in the NZ Refining Co Ltd – from global energy company Shell in 2010. Their remaining 20% each on listing was locked in until the release in November of Z’s results for the half-year to 30 September 2014.

The 2 partners announced their Australian joint venture in a statement to the NZX & ASX after the markets closed on Christmas Eve.

Their agreement is to acquire 100% of RetireAustralia from JP Morgan Chase & Co and Morgan Stanley for $A640.2 million, with settlement scheduled for Wednesday, 31 December.

Australia media said early this year the vendors had contemplated listing RetireAustralia, but abandoned that option in August.

Infratil & the Super Fund will invest $A214.8 million of equity each and take over existing bank debt on RetireAustralia’s balance sheet for the remaining 30% of the investment.

The consideration includes estimated transaction costs of $A23.5 million and is subject to the usual completion adjustments for working capital & net debt. The acquisition price represents a multiple of 1.0x NTA.

RetireAustralia managing director Tim Russell founded Meridien Retirement Living (now RetireAustralia) in 2005 and built up a portfolio of 3700 independent living units & apartments through the acquisition of 28 retirement villages in New South Wales, South Australia & Queensland, with development plans for another 500 units. It is the largest privately held pure-play retirement operator in Australia.

Mr Russell spent 10 years in investment banking & funds management at Graham & Co and Bankers Trust before joining FKP Ltd as investments general manager in 2003. He was responsible for creating FKP’s real estate funds management business and had overall responsibility for its retirement business.

FKP, previously a property developer, also became Australia’s biggest retirement village operator a decade ago. Through the Retirement Villages NZ Ltd partnership with Macquarie Bank, FKP bought a majority stake in NZX-listed Metlifecare Ltd, exiting at the end of 2013 after the merger of 3 retirement village companies into an enlarged Metlifecare.

Out of that selldown, Infratil & the NZ Super Fund acquired 19.88% of Metlifecare each.

Infratil chief executive Marko Bogoievski said in the Christmas Eve statement: “RetireAustralia provides a strong platform in an Australian sector that offers very attractive long-term growth prospects…. The business has the potential to become the market leader in the retirement living sector.

“RetireAustralia is led by an experienced management team and comes with a strong development pipeline & a mature existing portfolio. Underlying ebit for the June 2015 financial year is forecast at $A35-40 million. [Underlying earnings before interest & tax is a non-GAAP financial measure which removes the impact of non-cash items, deferred tax & the impact of the company’s capital structure.]

“We have spent a considerable amount of time evaluating the sector in Australia and identified RetireAustralia as a high quality access point, given the profile of the assets and the capability of the management team.”

Super Fund chief investment officer Matt Whineray said: “We are pleased to be increasing our exposure to the retirement village sector in Australia. The sector’s attractive demographics & growth opportunities make it a good fit for long-term investors such as the NZ Super Fund.”

RetireAustralia chief executive Mr Russell said: “My preference has always been to find owners like Infratil & the NZ Super Fund who have the necessary experience & access to capital to enable a long-term focus for the business as it enters the next phase of growth.”

Attribution: JV release.

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Z Energy priced at $3.50

Z Energy Ltd shareholders Infratil Ltd & the NZ Superannuation Fund will realise a gross $840 million from their sale of 60% of the fuel retailer at $3.50/share.

The price is the midpoint in the initial public offer range of $3.25-3.75.

Infratil chief executive Marko Bogoievski said yesterday: “We received a strong response from the retail broker network, with their allocations requiring significant scaling. We have also been delighted with the positive response from institutional investors, which we see as a validation of the New Zealand economy, the transport fuels industry and the achievements of Z under our ownership.”

“Our feedback suggests investors have been attracted to Z Energy’s cashflows, dividend outlook & range of potential future growth areas.”

Z will be New Zealand’s first listed transport fuels distribution company and is expected to be among the 20 largest New Zealand companies on the NZX main board. Shares in Z will start trading at 11am on Monday, initially on a conditional settlement basis.

Infratil and the Super Fund bought Z – Shell NZ Ltd’s distribution & retail businesses and 17.1% interest in the NZ Refining Co Ltd – from global energy company Shell in 2010, with each party taking a 50% share. Their remaining shares on listing will be locked in until the release of Z’s results for the half-year to 30 September 2014.

Attribution: Company release.

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Z Energy float planned for August

Z Energy Ltd shareholders Infratil Ltd & NZSF Aotea Ltd (for the NZ Superannuation Fund) confirmed their plans yesterday to list up to 60% of Z in August. They intend to list the company on both the NZX & ASX. The offer document was registered by the Registrar of Financial Service Providers yesterday.

Infratil chief executive Marko Bogoievski said Z Energy had strong cashflows, a good dividend outlook and had identified a range of potential future growth areas, including new retail service stations, customer offers & enhancements to Z’s terminal infrastructure.

“Z Energy has been a very good investment for Infratil and, while an initial public offering will see us reducing our holding, we will still have a significant investment after the proposed IPO.”

Super Fund spokesman Stewart Brooks said Z Energy had responded well to increased capital investment over the last 3 years, successfully rebranding and placing a strong focus on customer service: “As a result, Z has increased in value and now represents a significantly larger proportion of the fund than it did when we purchased it in 2010. Reducing our stake via a partial listing will help diversify the fund’s investment portfolio, as well as adding depth to New Zealand’s capital markets.”

Z will be New Zealand’s first listed transport fuels company and is expected to be among the largest 20 New Zealand companies on the NZX main board.

At the price indication range of between $3.25-3.75/share, the listing will raise between $650-$900 million.

Infratil and the Super Fund bought Z Energy from global energy company Shell in 2010, with each party taking a 50% share. Their remaining shares on listing will be locked in until the release of Z’s results for the half-year to 30 September 2014.

There will be some governance changes ahead of listing. Mr Bogoievski will relinquish the chairmanship, which will be taken up by independent director Peter Griffiths, but will remain as a director.

Mr Griffiths is a veteran of the downstream fuels industry. He was managing director of BP NZ Ltd for 10 years, was a director of the NZ Refining Co Ltd, Liquigas & Bitumix and is a director of Northland Port Corp Ltd, NZ Oil & Gas Ltd, Wanganui Gas Ltd and NZ Diving & Salvage Ltd.

Link: Offer document

Attribution: Company release.

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Infratil launches new bonds

Published 16 October 2012

Infratil Ltd has registered the prospectus for a new 6-year unsecured, unsubordinated infrastructure bond offer after telling holders of its 2012 series that those bonds won’t be converted to shares.

Holders of the existing bonds can redeem them for cash or exchange them for the new bonds.

Infratil has opened a public offer of $25 million of bonds, with the ability to accept up to $50 million of oversubscriptions. Exchange bonds will be in addition to that.

The old bonds mature on 15 November. The new bonds carry a coupon of 6.85%/year and mature on the same day in 2018.

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Attribution: Company release, prospectus, story written by Bob Dey for the Bob Dey Property Report.

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Infratil opens infrastructure bonds offer

Published 8 November 2011

Infratil Ltd opened a 6-year 8% infrastructure bonds issue yesterday, offering up to $25 million with the option to accept oversubscriptions to $50 million.

That part of the offer is open to all investors in New Zealand. Under a second part, Infratil is offering holders of its infrastructure bonds maturing next Tuesday, 15 November, the opportunity to exchange all or some of their 2011 bonds for the new ones.

Applications in the public pool will be processed on a first-come first-served basis until Infratil chooses to close the issue or the issue is filled.

Offer managers are Forsyth Barr, ANZ National Bank, First NZ Capital and Westpac Banking Corp. The bonds will be listed on the NZX.

Link: Infratil bonds

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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Infratil collects $116 million for year from Shell acquisition

Published 18 May 2011

Infratil Ltd has picked up $61 million of asset revaluations and $55 million of earnings already from its $210 million investment in Shell NZ Ltd’s distribution & retail businesses in March 2010.

Infratil and the Guardians of NZ Superannuation set up a 50:50 consortium to buy the Shell businesses for $696.5 million, plus an adjustment for actual net working capital. Infratil’s $210 million figure is its holding cost. The consortium traded initially under the name Greenstone Energy Ltd, but changed that to Z Energy Ltd last week.

The Z Energy gains were a highlight of Infratil’s results for the March year, released yesterday.

The company said it increased ebitdaf – earnings before interest, tax, depreciation, amortisation, realisations & impairments, and fair value movements of financial instruments – by 27% to $460 million. Operating earnings rose 92% to $173 million, the net parent company surplus by 122% to $65 million. Parent company comprehensive income was up 305% to $118 million, at 19.6c/share. The company will pay a fully imputed 4.25c/share final dividend on 17 June, up 13%.

Operating revenue was up 10.5% to just over $2 billion. Net operating cashflow increased by 36% to $179 million. Infratil’s capital & investment spending of $475 million was up 146% (not including Z Energy’s own capital spending of $29 million).

The company said the last year was “perhaps Infratil’s most successful with regards to earnings, value growth and investment in future value creation. Supporting these outcomes was comprehensive liability & risk management and the unheralded but crucial strengthening of the management team”. It said the Shell acquisition was the standout event, returning $116 million for the year from earnings & revaluations. “More importantly, the Z Energy team has developed a comprehensive strategy to grow the business through investment in its distribution, logistics & marketing capability. “The other highlight was the $55 million earnings contribution from Infratil Energy Australia. Given that Infratil formed this company as a start-up several years ago, it is gratifying to see the returns now resulting from the capital & effort which have been committed.” Want to comment? Go to the forum.


Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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