Published by Financial Standard – 21st Dec 2017
ANZ’s attempted sale of a subsidiary business to a Chinese firm has been blocked by New Zealand’s Overseas Investment Office.
HNA Group has been in talks to purchase UDC Finance, an asset financing firm acquired by ANZ Bank New Zealand in 1980. ANZ said the transaction proceeds would have equated to roughly 10 basis points of APRA CET1 capital.
ANZ New Zealand chief executive David Hisco explained that while the sale agreement remains in place, “unless HNA successfully overturns the OIO decision, the sale will not proceed.”
“We don’t know if HNA will attempt to overturn the decision,” he added.
Hisco said that if the sale cannot proceed, ANZ will “assess our strategic options regarding the future of UDC. It’s a great business and there is no immediate requirement to do anything, particularly given the strength of ANZ’s capital position.
“UDC continues to be a highly profitable and strong business, with great staff and customers, and a growing loan portfolio across a range of industries. UDC’s focus remains on its core business of financing vehicles and equipment for people and companies across New Zealand, so it will be business as usual for our staff and customers.”
ANZ originally announced the UDC deal back in January, with HNA agreeing to purchase the firm for NZ$660 million. Hisco said at the time that the agreement was “consistent with our strategy to simplify the bank and [it] is a good outcome for customers and staff.”
News of the sale precipitated a downgrade in UDC Finance’s credit rating by S&P, who said that UDC’s “strategic importance to its ultimate owner, ANZ, has significantly weakened as we now believe that the finance company may be sold by the parent within one year. Consequently, we no longer equalize our ratings on UDC with those on its parent.”
