Rubbish collector Waste Management is for sale.
The Australian company which bought the business in 2006 for $880 million, Transpacific Industries, says it wants to sell the New Zealand arm so it can focus on growth opportunities in Australia.
It says the decision to sell the business follows an operational review. However, it is clear the business has not prospered under Australian ownership.
TPI New Zealand is forecast to post operating earnings of about $110 million in 2014.
Before the takeover eight years ago, it was expecting annual operating earnings to be about $95 million.
Transpacific says the review showed that, although the waste firm has made considerable progress in strengthening its financial position by cutting debt over the last two years, further reductions are needed.
However, it says the quality of the New Zealand arm's assets, its leading market position, its people and its strong customer relationships should interest investors.
TPI to consider all options
Transpacific Industries will consider all options, including a share market float, for selling its New Zealand operations.
The Australian company plans to use the proceeds from the sale to reduce debt but says the sale will only happen if the price is right.
Managing director of the New Zealand operations Tom Nickels, who wants to continue managing the business, says all options are on the table.
He says Transpacific has taken a review of its operations across Australia and New Zealand over the last seven months using L.E.K. Consulting.
Mr Nickels says the review considered a range of opportunities, one of which was to change the portfolio in order to fund growth opportunities, so the decision was made to look to divest the New Zealand division.
He says the company's advisors will be working on the best value return for shareholders and positioning the New Zealand business as best it can for future growth and prosperity.
