Wednesday 11 January 2017 10:01 AM
ANZ sells UDC Finance to China's HNA Group for $660 million
By Paul McBeth
Jan. 11 (BusinessDesk) - ANZ Bank New Zealand has sold UDC Finance to HNA Group for $660 million, marking the Chinese
company's first foray into New Zealand.
The deal is subject to various approvals and is expected to be completed late in the second half of the year, and will
deliver a net gain to ANZ of A$100 million, the lender said in a statement. The sale price is $235 million above UDC's
net assets, or a price-to-book ratio of 1.6 times.
"The sale of UDC is consistent with our strategy to simplify the bank and is a good outcome for customers and staff,"
ANZ New Zealand chief executive David Hisco said in a statement. "HNA is well placed to invest in specialist asset
finance products and systems which will help UDC expand further in the future."
The finance company's ownership has been up in the air for almost a year, attracting suitors including NZX-listed
Heartland Bank, though HNA emerged as the front-runner in December. ANZ's review of the ownership triggered Standard & Poor's to downgrade UDC's credit rating to A- from AA- and that question mark made it more difficult for the finance
company to attract debenture funding.
Hainan, China-based HNA, which evolved from a regional airline to a global conglomerate with more than US$90 billion of
assets, plans to preserve UDC's existing operations, keeping all staff and customers.
HNA vice chairman and chief executive Adam Tan said the Auckland-based non-deposit taker provides "significant growth
opportunities in Australasia and supports HNA Group's disciplined approach to our core tourism, logistics and financial
services businesses."
UDC holds the highest credit rating among its deposit-taking peers, with Liberty the only other NBDT with an investment
grade rating at BBB. UDC is currently offering 3.6 percent for a 12-month term deposit, sitting in the middle of the
pack among other finance companies. However, longer duration terms are largely lower than UDC's peers.
The lender's debenture funding shrank to $1.59 billion as at Sept. 30 from $1.74 billion a year earlier, reducing its
share of deposits among finance companies to 57 percent from 61 percent a year earlier. At the same time, UDC's loan
book expanded 9.6 percent to $2.57 billion, helping generate a record profit of $58.3 million.
(BusinessDesk)
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