German firm set to buy 60pc of VTNZ
The Motor Trade Association, which fought a highly visible but unsuccessful campaign against warrant of fitness reform, has agreed to sell 60 per cent of New Zealand's biggest vehicle inspection company.
The MTA announced yesterday it would sell 60 per cent of Vehicle Testing New Zealand to Germany-based DEKRA for $36 million.
An option to sell the remaining 40 per cent at the end of 2016 values the company at $60m overall.
The deal for VTNZ, which last year had turnover of $88m, is conditional on gaining MTA member support at a meeting in Wellington on September 20.
MTA bought VTNZ when it was privatised in 1999, and is the sole shareholder. If the sale is approved by MTA members, made up of more than 4000 industry professionals, it is expected to be formalised by the end of next month.
MTA president David Storey said the company wanted to restructure and broaden its investment portfolio.
"Partnering with DEKRA makes a lot of sense given the likely environment for vehicle inspections in the future." Funds from the sale would be reinvested to help spread risk and return for MTA.
MTA said the Government had signalled it would open up the certificate of fitness (COF) market, which would potentially lead to a greater number of providers.
Motor racing star Greg Murphy fronted an MTA campaign against new WOF regulations, which were confirmed earlier this month.
From January next year vehicles weighing less than 3.5 tonnes and registered between 2004 and 2008 will require annual, rather than six-monthly, WOF checks. Six months later the changes will be extended to vehicles registered since 2000, which Transport Minister Gerry Brownlee said would save New Zealanders $1.8 billion over 30 years.
This saving would directly impact on VTNZ, which has 84 testing stations around the country.
MTA spokesman Ian Stonarch said the sale had been planned long before the licensing reform.
"What's happened has been part of a process that's been on the go for a while but really kicked into gear at the start of last year."
Stonarch said VTNZ was never considered a perpetual hold for MTA and had been close to sale a number of times previously. It was difficult to tell whether MTA members were supportive of the sale.
He said DEKRA was the world's largest vehicle inspection provider, carrying out more than 23 million checks a year, and in 2012 generated revenues of about $3.8b.
"We see there being some considerable value in tapping into the experience and brains of an organisation like that."
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