Westpac (ASX:WBC) will sell its Pacific businesses – Westpac Fiji and Westpac’s 89.91% stake in Westpac Bank PNG Limited – to Kina Securities for up to $420 million.
Westpac Group Chief Executive, Specialist Businesses & Group Strategy, Jason Yetton, said the sale follows the Group’s strategic decision to focus on consumer, business and institutional banking in Australia and New Zealand.
The sale price is made up of $315 million payable at completion and $60 million to be paid six-monthly over the following 18 months for Westpac PNG. The sale price also includes earn-out payments of up to $45 million which are scheduled to occur annually over 24 months following completion and are subject to the business performance of Westpac Fiji.
It is expected there will be an accounting loss on sale of approximately $230 million1 including a foreign currency translation reserve (FCTR) loss which will be based on exchange rates on completion.
The sale is subject to various regulatory approvals in Fiji and PNG and Kina shareholder approval.
Shares in Westpac (ASXWBC) are trading 0.2 per cent higher at $20.31