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Finance boost for UDC buyer

TIP Trailer Services, a subsidiary of HNA Group leading the purchase of UDC from ANZ, has secured new financing arrangements to a total of $2.7 billion for UDC which will be effective when the sale is complete.

Monday, 3 July 2017

The lenders include UDC’s current owner, ANZ, as well as Commonwealth Bank of Australia, Westpac, Deutsche Bank AG, a fund managed by Credit Suisse Asset Management, and the NZ Superannuation Fund.

“We are pleased to have the commitment from these lenders for the secured funding facilities that back our lending programme,” said Bob Fast, President and chief executive of TIP Trailer Services.

“This funding will underpin UDC’s competitive position under our new ownership. It’s good to be able to provide this assurance to customers well in advance of the planned separation and transfer of UDC to new ownership.”

In January, it was announced that HNA Group had signed a sale and purchase agreement to buy UDC from ANZ subject to regulatory approvals. Fast said securing this funding marked an important milestone in the separation process from ANZ.

“Being able to secure this funding is a reflection of the quality of the asset base. UDC finances trucks, vehicles, construction equipment and other assets that enable backbone industries of New Zealand.

“A disciplined financing approach is one of the reasons UDC has been in business for almost 80 years. We will continue this proven approach, supporting the growth and aspirations of New Zealand businesses and delivering for investors.”

He said the $2.7 billion finance facilities would give room for UDC to grow.

HNA bought TIP from GE Capital in 2013, and TIP reports into the HNA Capital division of the larger HNA Group. TIP has grown by 20% each year for the last three years.

UDC intends to offer a new debenture programme, details of which will be announced following regulatory and trustee approvals.

After separation, UDC will continue to be led by its current CEO, Wayne Percival.  Percival, who worked for UDC from 1993 to 2004 and has been at the helm of the company since 2015, said the proposed new debenture programme would be on a smaller scale to the current programme.

“UDC believes the arrangements being made by TIP in terms of the new financing and the changes to the debenture programme will be a good fit for the New Zealand market, and will serve customers well as UDC moves forward under new ownership.”

Subject to regulatory approvals, the sale is expected to be completed in late 2017.  After separation from ANZ, UDC will retain its current management team and remain a standalone business. Staff will also be offered continued employment and a number of new positions will be created to cover some of the shared services that came with being part of ANZ.

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