A flurry of interest in the shares of wasted waste group Transpacific Industries (TPI) when yesterday’s AGM was told the company is planning to sell its New Zealand operations.
The news saw a 4.8% uptick in the shares (to a close of $1.09, so the rise was just over 5c) as investors realised that the company could raise a couple of hundred million dollars, if a buyer can be found.
The company has recently sold its motor vehicle distribution business, and now the NZ waste business is up for sale.
Deutsche Bank has been hired to sell the New Zealand assets. Two years ago they were written down by $180 million to $200 million.
According to what was said at the AGM, the NZ business has a forecast earnings before interest, tax, depreciation and amortisation of $NZ110 million for the year to June 2014.
Transpacific said the funds raised would be used to reduce debt as well as allow it to pursue growth opportunities.
TPI YTD – Shares Up As TPI Looks To Offload More Assets
"The quality of TPI New Zealand’s assets, its leading market position, its people and its strong customer relationships are expected to attract interest from investors that are well-placed to develop and grow that business," chairman Martin Hudson told shareholders Wednesday.
He said the business would only be sold if it brings value to shareholders.
But as encouraging as the news was on the possible NZ sale, shareholders at yesterday’s AGM were told that the Australian business climate for Transpacific remained weak.
Mr Hudson said trading conditions so far this financial year have shown no improvement from the tough trading conditions experienced in the second half of the financial year to June.
Australia remains the problem because that’s where the bulk of the assets are located, as well as the debt.
