It was announced today that New Zealand Post is selling the stake in a deal that values the bank at $1.1 billion.

The two new shareholders will be required to hold their stakes for at least five years. If they eventually sell, it has to be back to the Crown.

Kiwibank is currently a subsidiary of NZ Post.

“Kiwibank will remain 100% Government-owned – that is a bottom-line,” Finance Minister Bill English said.

“To ensure this occurs, the proposal includes a right of first refusal for the Government over any future sale of shares – which we would exercise.”

State-Owned Enterprises Minister Todd McClay said the proposal could create benefits for Kiwibank, NZ Post, ACC, NZSF and taxpayers – but would need to stack up if it was to proceed.

“When NZ Post chairman Sir Michael Cullen approached Ministers with the proposal, he explained it could give Kiwibank access to extra sources of capital for future growth and broaden its exposure to commercial expertise,” McClay said.

“NZSF and ACC would have an investment in a profitable local company. NZ Post would receive a return for the shares, some of which would be used to repay debt built up to support Kiwibank’s expansion and some would be paid to the Government as a special dividend.”

NZ Post, NZSF and ACC are currently in discussions over the details of the transaction. A final decision about whether it goes ahead will be made later this financial year.