Electricity distributors WEL Networks and Waipa Networks have agreed to sell their shares in Hamilton-based UFF Holdings, the holding company for Ultrafast Fibre (UFF).
First State Investments (FSI) has agreed to purchase WEL’s 85 per cent majority shareholding and Waipa’s 15 per cent shareholding for $854 million of which a consideration of $200 million payable to WEL is deferred for 18 months from completion.
The $200 million deferred payment is supported by obligations enforceable against the purchaser.
Established in 2010, Ultrafast Fibre owns and operates the fibre network in the urban areas of Hamilton, Tauranga, Whanganui, New Plymouth, Tokoroa, Hawera, Cambridge and Te Awamutu, providing access to ultra-fast broadband for more than 237,000 premises.
"There’s never been a better or bigger time for fibre and we look forward to the ongoing support from our new investors as we continue to explore new opportunities and develop exciting new products for internet users around the North Island," Ultrafast Fibre CEO John Hanna said.
The existing UFF management team will remain in place and the transaction is subject to Overseas Investment Act approval.
WEL Group chairman Rob Campbell said the sale enabled WEL Networks to strengthen the core electricity business balance sheet, allowing us to pursue new opportunities and invest in innovative energy solutions.
"The investment in fibre has both delivered valuable infrastructure to our communities and proved a very successful investment for WEL," he said.
FSI said it was delighted to add another important network business to its investment portfolio in New Zealand after its 2016 investment in First Gas.
"We look forward to supporting the strong fibre uptake the business has achieved in New Zealand's highest growth region and continuing to provide high-quality fibre infrastructure services to the community," said FSI infrastructure investments director Gavin Kerr.
"This is a great opportunity for our Waikato community. We’d like to congratulate the WEL and Waipa teams on their 10-year fibre investment journey," said WEL Energy Trust chairman Mark Ingle.