NZ Post sells Australian Couriers Please unit for A$95m

New Zealand Post, the state-owned mail delivery service, sold its Australian Couriers Please business to Singapore Post for A$95 million.

The unconditional deal between the Wellington-based state-owned enterprise and the Australian subsidiary of Singapore Post was signed today, and is expected to be completed on Dec. 15, NZ Post said in a statement. The New Zealand SOE kept the unit's assets and liabilities confidential in its 2014 annual report as a result of the decision to sell it, and had previously valued the courier firm's goodwill at $38.2 million and its brands at $21.6 million as at June 30, 2013.

"The Couriers Please business has performed extremely well and been a highly successful investment for New Zealand Post, increasing in value on the strength of a clear strategy and its trading performance since we bought it outright in 2012," chief executive Brian Roche said. "New Zealand Post will use the proceeds to invest in our business transformation in New Zealand as part of our five-year strategy."

NZ Post hired 333 Capital in July to run the sale of the Australian courier business, which operates metropolitan delivery across the Tasman. Couriers Please has about 570 couriers and more than 130 staff.

The SOE has been streamlining its business in recent years as it contends with shrinking mail volumes in an increasingly digital world, laying off staff and reducing its physical store footprint. At the same time, the group has targeted earnings growth from its Kiwibank unit, which it expects will start delivering returns after a decade of aggressive pricing to build market share.

NZ Post's Roche said the SOE had rejected an offer from another party to buy the courier unit in 2012, and had gained valued from today's sale.

The transaction has been approved by the Australian Foreign Investment Review Board.

The yield on NZ Post's $200 million of listed bonds fell 0.4 percent to 5.75 percent today, trading at $102.946 per $100 face value. The bonds mature in November 2019 and pay an annual coupon of 6.35 percent.

(BusinessDesk)