Z Energy, the petrol station chain, plans to raise up to $900 million in an initial public offering next month, allowing owners Infratil and the New Zealand Superannuation Fund to crystallise some of their profits on the three-year investment.
The chain's indicative price range is between $3.25 and $3.75 a share, giving an implied market capitalisation of between $1.3 billion and $1.5 billion, and making it the 15th or 16th biggest company on the stock exchange.
Wellington-based Z won't retain any of the funds raised in the sale. It will offer between 113 million and 130 million of new shares worth some $422.4 million to repay funds owed to shareholders and pay for their shares of NZ Refining, according to its prospectus filed with the Companies Office today.
Infratil and the NZ Super Fund, via their holding company, will also sell between 40 per cent and 50 per cent of their existing shares in the chain, pulling out between $228 million and $478 million.
They paid just under $700 million in 2010 when they acquired the Shell service stations as part of a larger acquisition of the energy group's downstream New Zealand assets.
"Z Energy has been a very good investment for Infratil and while an initial public offering will see us reducing our holding, we will still have a significant investment after the proposed IPO," Infratil chief executive Marko Bokoievski said in a statement.
The IPO returns are in addition to the $50 million special dividend to Infratil and the NZ Super Fund announced earlier this month.
The offer document forecasts operating earnings of $219 million in the 2014 financial year and $104 million in the first half of 2015, based on a historical cost measure, which is how it reports to the tax department.
Net profit is expected to be $115 million in 2014, and $50 million in the first half of 2015. The directors expect to declare a dividend of $88 million in the 2014 financial year, implying a gross dividend yield of 8.1 per cent to 9.4 per cent.
The bookbuild to set the price will be held on August 15 and 16, with a listing expected on August 19.
The offer is made up of a retail offer to broking firms and staff and an institutional offer. There won't be a public pool.