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ANZ sells UDC to Chinese conglomerate

NZ Newswire logoNZ Newswire 10/01/2017 Paul McBeth

ANZ Bank New Zealand has sold UDC Finance to HNA Group for $660 million, marking the Chinese company's first foray into New Zealand.

The deal is subject to various approvals and is expected to be completed late in the second half of the year, and will deliver a net gain to ANZ of $A100m ($NZ105m), the lender said in a statement on Wednesday.

The sale price is $235m above UDC's net assets, or a price-to-book ratio of 1.6 times.

The sale is consistent with ANZ's strategy of simplify the bank and is a good outcome for customers and staff, the bank's chief executive David Hisco says.

"HNA is well placed to invest in specialist asset finance products and systems which will help UDC expand further in the future."

The finance company's ownership has been up in the air for almost a year, attracting suitors including NZX-listed Heartland Bank, though HNA emerged as the front-runner in December.

ANZ's review of the ownership triggered Standard & Poor's to downgrade UDC's credit rating to A- from AA- and that question mark made it more difficult for the finance company to attract debenture funding.

Hainan, China-based HNA, which evolved from a regional airline to a global conglomerate with more than $US90 billion ($NZ129b) of assets, plans to preserve UDC's existing operations, keeping all staff and customers.

HNA vice chairman and chief executive Adam Tan says UDC provides significant growth opportunities in Australasia.

UDC holds the highest credit rating among its deposit-taking peers.

The lender's debenture funding shrank to $1.59b as at September 30 last year, from $1.74b a year earlier.

At the same time, its loan book expanded 9.6 per cent to $2.57b, helping generate a record profit of $58.3m.

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