Z Energy latest to launch IPO

JAZIAL CROSSLEY AND ELLEN READ
Last updated 07:13 26/07/2013
Mike Bennetts
MAARTEN HOLL/Fairfax NZ
HIGH-ENERGY CAPITAL RAISING: Z Energy, which is led by chief executive Mike Bennetts, has launched a public offer.

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Petrol-station chain Z Energy is expected to list in New Zealand on August 22 after registering its initial public offer documents with the NZX.

It is looking to raise between $650 million and $900m, based on an indicative price range of $3.25 and $3.75 a share, in a book build that will take place next month.

Z Energy is the latest company to join the NZX after a busy year for floats, including dairy giant Synlait this week, Wynyard Group earlier this month, and Mighty River Power and SLI Systems in May.

As part of the dual listing here and across the Tasman, Z Energy's owner, NZSF Aotea, on behalf of the New Zealand Superannuation Fund and Infratil, will reduce their joint stake to between 40 per cent and 50 per cent.

The two shareholders previously stated they wanted to reduce their stakes because the rapid valuation gain in Z Energy, after the retailer separated from Shell's vertical supply chain, pushed them overweight.

Z Energy was established when it was bought from Shell in April 2010. Since then, it has invested $94m in new retail service stations, storage facilities, re-branding, research and development.

New Zealand Superannuation Fund spokesman Stewart Brooks said Z Energy had responded well to increased capital investment and the rebrand had been successful.

"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."

For the year to March, Z Energy reported a "solid" operating profit of $195m, in the middle of its earlier guidance range of $185m to $200m.

To combat its dip in market share, to 30 per cent in the 2013 financial year from 32 per cent two years ago, it has been identifying growth areas.

Infratil chief executive and Z Energy chairman Marko Bogoievski said it was looking at new retail service stations, enhancements to its terminal infrastructure and new offerings for customers in store.

While Bogoievski will remain on the board as a director after the listing, independent director Peter Griffiths, who has been involved since its acquisition from Shell, will become chairman.

"He has a strong background in this industry and in Z Energy," Bogoievski said.

Griffiths was previously the managing director of BP for a decade and has served on the boards of New Zealand Refining Company and Liquigas. He is a director of Wanganui Gas and New Zealand Oil and Gas.

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Broking firms First NZ Capital, Goldman Sachs, Craigs Investment Partners and Forsyth Barr are managing the float.

Infratil and the Super Fund acquired Z in March 2010 from global energy giant Shell for $696.5m. It is now valued at $1.05 billion, according to the fund's January investment statement.

The offer opens to New Zealand brokers and staff next Friday, then to Australian investors on August 9.

Z is expected to being trading on August 22. It will be New Zealand's first listed transport fuels company and is expected to be among the largest 20 Kiwi firms on NZX's main board.

- The Dominion Post

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