Z Energy float possible not probable

TIM HUNTER
Last updated 12:24 15/02/2013

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Infratil executive Tim Brown has poured cold water on speculation a float of fuel company Z Energy is imminent.

A report in the NZ Herald today said Z Energy, jointly owned by Infratil and the NZ Super Fund, would float in July and an announcement was expected at Infratil's investor day on March 8.

Brown said Infratil's ownership of assets was always being discussed but it was too early to say whether Z would be floated.

Brown said a sale of Z was possible, but not necessarily probable.

"We can't say about the Z [rumour] 'that would never happen' or 'we're not even thinking about it', because that would be a lie. But we can't say 'fair cop this is something that might happen'.

"People always come up with hypotheticals about 'they might do this, they might do that, they might do 58 other things'. " he said. "It's hard to look at any one and say I suppose we might, but then again we might not."

Z Energy was acquired by Infratil and the Super Fund from Shell in 2010 for $696.5 million in March 2010. It comprises a 17 per cent stake in the Marsden Pt oil refinery, a pipeline from the refinery to Auckland, a network of retail service stations and other infrastructure assets.

Sources said they were not aware of any plans to float Z Energy, but the idea had merit.

"It's eminently floatable," said one. With the Super Fund selling a 7 per cent stake in Auckland Airport overnight, "the fund has proved they are happy to rotate the portfolio."

Another said the market was currently receptive to a sale, so if it was on the block it made no sense to delay.

"If I had an asset like that I'd be heading for the market now," he said. The business was stable with a good dividend yield and was unlikely to be worth more next year than it was today.

"Everyone would like to see Infratil cycle through some of these assets. It would be nice to see them tidy up the portfolio," he said.

In a statement to the NZX Infratil said it was aware of speculation about its subsidiaries Z Energy and NZ Bus.

"Infratil reviews its portfolio on an ongoing basis, including new investment and divestment opportunities. It has not, however, identified any particular investments for sale at this time,"

Infratil shares eased a cent this morning to $2.42, valuing the investment company at $1.4 billion.

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- BusinessDay.co.nz

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