By Mark Mackay

PERTH-BASED transport group Stagecoach has sold-off its New Zealand operation in a £100 million (NZ $250.5 million) deal.

The move will see Auckland’s main bus and ferry operator return to New Zealand ownership.

Infratil Limited, a specialist investor in infrastructure and utility assets, expects to conclude the deal for Stagecoach NZ by November 29.

Stagecoach NZ operates bus services in the Wellington and Auckland areas, together with ferry services in the Auckland area.

It reported turnover and operating profit in the year ending April 30, 2005, of £59 million and £8.7 million respectively.

Despite the success of the operation, the Scottish firm decided Infratil’s offer was in the best interest of its shareholders.

The deal will net Stagecoach a £20 million profit on its investment in the Kiwi holdings.

Proceeds from the disposal will initially be used to reduce net debt carried by the firm to finance acquisitions.

Stagecoach NZ’s management team will remain with the operation under its new owner.

Stagecoach Group chief executive Brian Souter (pictured) said, “The group’s New Zealand operations have been tremendously successful under our ownership, delivering excellent financial returns.

“We received an approach about the possible sale of the business and, after assessing Infratil’s offer and the prospects for the New Zealand operations, we concluded that the disposal was in the best interests of our shareholders.

“We remain focused on our strategy of maximising shareholder value from the group’s portfolio of bus and rail businesses through organic growth.”

Mr Souter said the group would continue to explore the potential for “complementary” acquisitions in the UK and North American bus markets.

Confirmation of the agreement was welcomed by Infratil, which owns airports in New Zealand and Europe and has experience of bus firms through management of Waikato buses.

“We are delighted to announce that this purchase is proceeding,” said the company’s chairman David Newman.

“Stagecoach New Zealand is an important part of the infrastructure of New Zealand.

“It is a well run business with significant potential.”

Infratil said it believed that strong economic and population growth, especially in Auckland, had caused significant stress on existing road infrastructure and while long-term plans are being developed to improve roads, a more immediate and cheaper solution was to improve public transport services.

Through its purchase of Stagecoach NZ, the company hopes to grasp the opportunity “to grow and improve Auckland’s public transport services.”

Stagecoach owns more than 900 buses in Auckland and Wellington and employs around 1800 people.