Infratil has announced a conditional sale of its 100% interest in its NZ Bus business (NZ Bus) to funds controlled by Next Capital. NZ Bus provides public transport operations in Auckland, Wellington and Tauranga under long term contracts with the relevant local authorities. The business comprises approximately 720 buses, operates from 13 depot locations and employs 1,400 staff across Auckland, Wellington and Tauranga.

The agreement is conditional on counterparty consents to the change of control, Overseas Investment Office approval, and standard material adverse change clauses, as well as full documentation of the vendor loan. Subject to satisfaction of the conditions, completion of the transaction is expected to be around 30 June 2019.

On completion of the transaction, Infratil expects to receive proceeds of approximately NZD218-240 million (~US$145-160 million), with final proceeds adjusted for normal working capital, capital expenditure, and net debt, and an earnout. Proceeds include provision of a vendor loan of between NZD20 and 30 million (~US$13.5 and 20 million) repayable within 5.5 years of completion.

UBS New Zealand advised Infratil on the strategic review and the transaction, and Murray & Co advised Next Capital.