New Zealand Post plans to sell 45 percent of Kiwibank to the Accident Compensation Corporation (ACC) and New Zealand Super Fund (NZSF), chairman Sir Michael Cullen has announced.
Kiwibank is currently a subsidiary of NZ Post.
No deal has been finalised yet, with the offer "subject to a number of matters including due diligence".
"[The offer] has been priced on a commercial basis, and reflects the Government's absolute position that Kiwibank must remain in public ownership," NZ Post said in a statement.
The offer is based on the $1.1 billion value of NZ Post's owner Kiwi Group Holdings, meaning NZ Post would receive $495 million.
"New Zealand Post approached the Government and pursued the initiative because it considers that NZSF and ACC are strong potential shareholders for Kiwibank as a Crown-owned bank," said Cullen.
"The two investment funds hold assets of over $60 billion between them while NZ Post continues to face headwinds in its core mail business."
Cullen said while the deal hasn't been signed, sealed or delivered yet, the company wanted to be proactive in announcing it.
He believes the agreement would secure the long-term future of Kiwibank, and it is time to broaden the bank's support within the wider public sector.
Cullen wanted to make clear that the proposed sale "is not some move to partial privatisation".
He hopes the sale can be completed before the end of the current financial year, though if it doesn't go through, Cullen said it won't leave Kiwibank in dire straits.
"Kiwibank is not in distress at all; it will be much more constrained [by] its capacity to grow."
If the proposal goes ahead, the NZSF would own 25 percent of Kiwi Group Holdings and ACC would own 20 percent.
The proposal will ensure Kiwibank remains wholly owned by the Government.
"Kiwibank will remain 100 per cent Government-owned - that is a bottom-line," said Finance Minister Bill English.
"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."
NZ Post has been struggling with an annual fall in revenue of up to $30 million, with 60 million fewer letters being sent each year. Last year it reported an underlying profit of $128 million, with Kiwibank accounting for $127 million of that profit.
Last month it announced a raft of changes including cutting staff, raising prices, and offering new services.
It planned to cut 500 jobs by July, as part of an effort to reduce staff by 2000, having axed about 1300 positions already.
It would raise the price of a standard letter from 80 cents to $1 and was making plans for door-to-door parcel delivery alongside everyday mail.
English previously had not ruled out separating the national mail service from Kiwibank but said that would not involve selling NZ Post.
Sourcs: Radio New Zealand and Newshub
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