Transpacific Industries Group, the Australian waste management company, has agreed to sell its New Zealand business to Beijing Capital Group for $NZ950 million ($A896.27 million).
The Queensland-based company hired Deutsche Bank in October to advise on the sale of its New Zealand unit, so it could focus on its more profitable Australian business.
It wrote down the value of the New Zealand business by $A188m in 2011 after acquiring the operations for $NZ870m in 2006.
The company’s decision to scale back its business comes after a debt-fuelled expansion before the global financial crisis, culminating in 2008 with the $A1.25 billion acquisition of rival Cleanaway to create Australasia’s biggest waste disposal firm.
“The sale of our New Zealand business gives Transpacific increased financial flexibility,” said chief executive Robert Boucher.
“Beijing Capital is focused on investing in and developing the New Zealand business.”
Beijing Capital is a Chinese state-owned specialist in water treatment, waste management, mass transit railways and toll roads, as well as one of China’s most prominent real estate developers. Its assets are valued at $US21 billion ($A23.52 billion).
Transpacific said proceeds from the sale will be used to redeem preference securities, refinance debt and fund future investments.
The company will consider the resumption of dividends in the near future, it said.
The deal is expected to be completed mid-year, subject to Overseas Investment Office and Chinese regulatory approvals.