EARNINGS from the New Zealand assets Chevron is to sell to Z Energy will be greater than previously thought, Z Energy says.
Chevron New Zealand agreed to sell its transport fuel business, which included Caltex branded petrol stations across the nation, to Z Energy for NZ$785 million in June.
Z Energy chief executive Mike Bennetts said the companies aimed to have the deal completed by the end of November.
“Z now expects that the financial performance of [Chevron NZ] is stronger than our initial assessment at the time of announcing the proposed acquisition,” he said.
“Other things being equal, based on these factors we would expect [Chevron NZ’s] current earnings to be stronger than the NZ$132 million estimate we had previously disclosed for the year ended December 2014 and in line with Z’s year-on-year forecasted growth in earnings.”
Acquisition and transition costs would be in the range of NZ$55 million, down from the NZ$64 million previously indicated, though any delays beyond the 30 November cutoff date would be at a cost of about NZ$2 million per month, Mr Bennetts added.
Synergies between the two companies would be worth between NZ$25 million and NZ$30 million, based primarily on additional cost synergies between the two, Mr Bennetts said.