UDC News

ANZ announces sale of UDC Finance

11 January 2017

Media Release

ANZ Bank New Zealand Ltd announced today it has agreed to sell its asset finance business, UDC Finance, for NZ$660 million to HNA Group, a Fortune Global 500 company focused on tourism, logistics and financial services.

ANZ New Zealand CEO David Hisco said the sale followed a strategic review and was in line with ANZ’s strategy to simplify its business and focus on its core banking activities.

The purchase price of NZ$660 million represents a price-to-book ratio of 1.6 times net assets of NZ$424 million as at 30 September 2016.

“UDC Finance is a great business which is performing well,” said Mr Hisco. “We’re extremely proud of what our teams have achieved over the years providing specialist asset-based finance to New Zealand businesses for plant, vehicles and equipment.”

Mr Hisco said the purchase of UDC Finance by one of the world’s largest asset finance and leasing companies was a significant vote of confidence in the New Zealand economy.

“HNA is well placed to invest in specialist asset finance products and systems which will help UDC expand further in the future,” said Mr Hisco.

HNA doesn’t currently operate in New Zealand so this sale will maintain competition in the asset finance and leasing market which is good for customers. HNA intends to preserve UDC’s operations, offering ongoing employment to all existing UDC employees and maintaining existing customer lending.

Since its founding in 1993, HNA Group has evolved from a regional airline based on Hainan Island into a global company with over US$90 billion of assets, US$30 billion in annual revenues and nearly 200,000 employees across North America, Europe and Asia. The financial arm of HNA operates a diverse set of businesses in equipment leasing, insurance, and credit services, including China’s largest non-bank leasing company, one of the world's largest aviation finance businesses, one of the world’s largest container leasing businesses, and Europe’s largest trailer leasing business.

“UDC’s highly diversified portfolio offers significant growth opportunities in Australasia and supports HNA Group’s disciplined approach to expand our core tourism, logistics and financial services businesses,” said Adam Tan, Vice Chairman and CEO of HNA Group.

“We are excited to welcome UDC Finance to the HNA Group family and we look forward to working with their experienced management team as they continue to support the growth and aspirations of New Zealand businesses, investors and consumers.”

The UDC sale is subject to closing steps and conditions including engaging with investors on the replacement of the Secured Investment program and regulatory approvals.  Completion is expected late in the second half of the 2017 calendar year.

For media enquiries contact:

ANZ
Louise Nicholson, + 64 9 2526289
 
HNA Group
Abby Lee, +852 3196 0956
or
Outside China: Sard Verbinnen & Co.
Bob Rendine, +1 212-687-8080
or Ron Low or Hannah Dunning, +1 415-618-8750

Sale of UDC Finance – FAQs

Why is ANZ selling UDC Finance?

UDC Finance is a great business which is performing well, however, the sale is in line with ANZ’s strategy to simplify its business and focus on its core banking activities.

Who is the new buyer?

HNA Group is a Fortune Global 500 company focused on tourism, logistics and financial services. Since its formation in 1993, HNA Group has evolved from a regional airline based on Hainan Island into a global company with over US$90 billion of assets, US$30 billion in annual revenues and nearly 200,000 employees across North America, Europe and Asia. The financial arm of HNA contains a diverse set of businesses in equipment leasing, insurance, and credit services.

Why have you sold to HNA?

We have been through a robust process to secure the best possible deal for the sale of the business – for UDC customers, staff and investors.  HNA is well placed to invest in specialist asset finance products and systems which will help UDC expand further in the future. HNA doesn’t currently operate in New Zealand so this sale will maintain competition in the asset finance market which is good for customers. HNA intends to preserve UDC’s operations and all staff will be offered jobs on similar terms.

What does this mean for customers?

HNA Group is buying the entire UDC business, which includes its lending book.  It has said it wants to retain existing commercial relationships so we don’t envisage any major change for existing customers or partners.  These details will be worked through over coming months.

What does this mean for investors?

There are no changes to investors’ current investments and they don’t need to take any immediate action.

The change in ownership presents an opportunity for UDC to modernise its financing arrangements which have been in place for almost 80 years.  We intend to hold a meeting of UDC Secured Investment holders in 2017, seeking their approval to wind up the debenture programme. If that approval is received, investors are likely to be given the option to:

  • Roll their Secured Investments into a comparable ANZ product
  • Have their investment repaid along with any interest; or
  • Apply the proceeds of their investment to subscribe for any new investment that might be offered by UDC under its new ownership.

We will be communicating with investors on this matter to keep them fully informed.

In the meantime, UDC will continue to accept new investments.  Please contact Investor Services 0800 653832 if you have any questions.

When will the transaction be completed?

The sale requires regulatory approval, including approval from the Overseas Investment Office.  It is also subject to closing steps and conditions including engaging with investors on the replacement of the Secured Investment programme.  We expect to conclude the sale in the second half of 2017.

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