Delayed ANZ Bank issue back on track

by GEOFF SENESCALL

ANZ Bank's New Zealand float is understood to be back on track after gaining approval from Inland Revenue for its $600 million issue.

However, a spokesman for ANZ in Australia would say only that the final sign-off was still being awaited. It was expected this could take a further month.

Delays in getting a binding tax ruling for its New Zealand offering - originally applied for last October - had led to two postponements of ANZ's estimated $500 to $600 million issue.

The float had originally been planned for March. ANZ was then forced to amend that date to May.

With final approval expected soon, it is likely that a float will now take place some time in July or August. ANZ declined to comment on the timing.

The Business Herald understands one of the reasons for the delay related to staffing at the Inland Revenue Department. The holdup was initially because a key staff member left the department. Approval was further delayed when another key member took annual leave.

ANZ is seeking the ruling so it can distribute imputation credits to shareholders from profits the company makes in New Zealand.

Unlike Westpac Bank, which obtained a similar ruling last year, the ANZ is seeking to have an exchangeable element to its issue. This would enable New Zealand shareholders to exchange their shares for the Australian securities.

The reason for this is to reduce the opportunity of arbitrage that might arise between the two shares.

This is a key issue for holders of Westpac New Zealand shares. At present, the securities are trading at a 22 per cent discount to the parent company shares, which they are supposed to be tracking.

This has caused some dissatisfaction among holders. It is made worse by Westpac declining to include New Zealand in its current share buyback programme.

Westpac's explanation to the Business Herald was that the New Zealand class shares were still only partly paid and had yet to find their level.