May 11, 2020 / 11:19 PM / 18 days ago

First State Investments to buy New Zealand's Ultrafast Fibre for $518.6 million

(Reuters) - Global investment manager First State Investments will buy New Zealand’s Ultrafast Fibre Ltd for NZ$854 million ($518.63 million) from WEL Networks Ltd and Waipa Networks Ltd, the electricity distributors said on Tuesday.

First State, now owned by Japan’s Mitsubishi UFJ Financial Group Inc (8306.T), will buy out WEL Network’s 85% stake and Waipa’s 15% stake in the fibre firm’s holding company UFF Holdings.

“We look forward to supporting the strong fibre uptake the business has achieved in New Zealand’s highest growth region,” First State’s Infrastructure Investments Director Gavin Kerr said in a statement released by WEL Networks.

He added that First State will continue to work with the existing management team.

Hamilton-based Ultrafast said the broadband network it operates accounts for about 14% of the entire national network.

The Australia-based infrastructure investor, with A$228.5 billion ($148.25 billion) in funds under management, has a portfolio in New Zealand that includes First Gas, acquired from Vector in 2016, and Quantem Bulk Liquid Storage & Handling, which operates across both sides of the Tasman.

First State was sold by Commonwealth Bank of Australia (CBA.AX) to Mitsubishi UFJ Trust and Banking for $2.7 billion in a deal completed last year.

Also in a statement, WEL Group’s Chairman said the sale “enables WEL Networks to strengthen the core electricity business balance sheet, allowing us to pursue new opportunities and invest in innovative energy solutions.”

Reporting by Arpit Nayak in Bengaluru; Editing by Chris Reese

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