WELLINGTON, New Zealand — The New Zealand government will take direct ownership of Kiwibank in a deal valuing the lender at NZ$2.1 billion ($1.3 billion), after rejecting the private investment for the company.
Ownership of Kiwibank was divided between the state-owned New Zealand Post Ltd. and two government investment funds. The government had a first right of refusal of any sale of Kiwibank shares. The bank, created by the New Zealand government in 2002, owns a small share of the country’s banking sector, which is largely Australian-owned.
NZ Super Fund, which owned 25% of Kiwibank, said on Monday it had wanted to buy NZ Post’s majority stake in the lender but could not get government approval for the ability to bring in capital private and governance. The sovereign wealth fund had also wanted a full range of trading options for any future sale of its stake. NZ Super Fund will receive NZ$527 million for its quarter stake.
A statement from the government indicates that the agreement does not entail any change in the state’s balance sheet because it is a transfer of assets between government entities. Central bank approval is required for the deal to go through.
“The government is fully committed to helping Kiwibank be a true competitor in the banking industry,” Finance Minister Grant Robertson said in a statement.