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20 Mar 2018 20:35
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  •   Home > News > National

    Infratil puts NZ Bus under microscope

    Infratil, fresh from losing the bulk of its Wellington bus contracts, is running the rule over its NZ Bus business and it could be sold or merged.

    Infratil, the publicly listed infrastructure investor, has begun a strategic review of its ownership of NZ Bus after concluding negotiations for contracts for Wellington and Auckland commuter services valued at $1.3 billion.

    It will engage with market participants over the coming months and proposals may include outright sale, merger or other options, chief executive Marko Bogoievski says.

    The aim was to maximising value and employee and other stakeholder outcomes and was expected to be completed within six months, he said.

    Infratil agreed five long-term contracts in Wellington last month and secured 20 long-term contracts in western, central and northern regions of Auckland last October.

    The Auckland contracts are for an average nine years and have a total value of $1b while the Wellington contracts average 10.8 years and have a value of about $323 million.

    Last year, Infratil said NZ Bus's loss of certain public transport contracts meant it would shrink to about two-thirds its original scale, with 75 per cent of the business in Auckland and 25 per cent in Wellington.

    In May 2017, NZ Bus lost most of its bus contract with the Greater Wellington Regional Council to Masterton-based Tranzit Group, which the council said could offer the service cheaper, reducing its share of services to 28 per cent from 73 per cent.

    Infratil has retained UBS New Zealand as an adviser for the review.

    Infratil shares fell 2.3 per cent to $3.03.


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