Australian listed waste management company Transpacific
Industries is looking to sell its widespread New Zealand
operations, to pay off debt, and focus on its Australian
Transpacific, the country's largest waste management company,
purchased its New Zealand operations in 2006 for $870
million. Transpacific's shares in Australia were up almost 9%
at $A1.09 ($NZ1.25) after opening, following the earlier
Following a business and operational review this year,
Transpacific said in an Australian market update yesterday it
had decided to divest its New Zealand business to allow
greater focus on growth opportunities in Australia.
''Over the last two years, Transpacific has made significant
progress in strengthening its balance sheet, reducing debt
and improving its funding costs,'' the company said.
A Craigs Investment Partners broker said Transpacific
initially had an aggressive acquisition strategy, largely
funded by debt, but then the global financial crisis struck,
which prompted many councils to renegotiate rubbish
''It [waste management] is an attractive sector. Transpacific
is a sound operator, but it has been impeded by layers of
huge debt,'' he said.
Transpacific listed in Australia in May 2005 and embarked on
its acquisition programme, including New Zealand's listed
Waste Management. Its 2014 New Zealand full-year earnings
before interest, tax, depreciation and amortisation is
forecast at $110 million.
In April last year, Transpacific reached a $A35 million (then
$NZ43.7 million) settlement with shareholders threatening a
class action alleging breaches of disclosure rules between
2007 and 2009.
Transpacific said yesterday any proceeds from a potential
sale, which would ''only proceed if it appropriately reflects
value for the shareholders'', would initially be used to
further pay off debt, possibly including redemption of the
step-up preference securities.
By the numbers
Transpacific Industries around Australia and New Zealand.
• 6500 employees, 1100 NZ.
• 300 sites and depots, 74 NZ.
• 4300 vehicles, 800 NZ.
• More than 50 technical treatment and processing
• More than 45 resource recovery, recycling and baling