Z Energy is a New Zealand fuel distributor with branded service stations. It comprises some of the former assets of Shell New Zealand and Chevron New Zealand. Shell left the New Zealand fuel distribution business in April 2010, selling its operations to Infratil and the New Zealand Superannuation Fund. The former Shell operations were rebranded as Z Energy in 2011. Since May 2022, it is a subsidiary of Australian petroleum company Ampol.
It operates service stations under the Z Energy and Caltex New Zealand brands. There are 289 Z Energy branded sites around New Zealand, including 60 in Auckland as of April 2023. There are also 203 Caltex branded sites, including 39 in Auckland as of April 2023.
Background
Shell withdrew from the fuel distribution market in New Zealand in 2010. Shell's New Zealand assets, including a 17.1% stake in Refining NZ, were acquired by Infratil and the New Zealand Superannuation Fund for $891 million. However the Taranaki based exploration and production division were not part of this sale portfolio.
Z Energy currently competes with BP, ExxonMobil subsidiary Mobil NZ and several smaller independent groups such as Gull New Zealand. Former competitors included Chevron's New Zealand subsidiary Caltex which Z Energy acquired in June 2016.
Founding
In 2010 the branding remained as Shell whereas the holding company was renamed from Shell NZ to Greenstone Energy. After surveying 17,000 customers the following year, the company changed its name to Z Energy Limited and branded the service stations as Z. The rebranding exercise is believed to cost around NZ$60m, compared to the NZ$10m/year cost of licensing the Shell brand. The company said it would focus on better forecourt service and better food.
Following the re-branding and after adding five new service stations, the market share for petrol held by Z Energy slipped from 31.6% in 2011 to 29.0% in 2013.
Following the change in ownership, the firm has employed more New Zealanders in positions that were previously outsourced overseas including: IT, finance and call centre services.
Acquisition
In 2010, Infratil and New Zealand Superannuation Fund paid for the Shell acquisition and its 17.1% shareholding in NZ Refining with $420 million of equity funding.
At the time of the acquisition from Shell, Z Energy had an ungeared balance sheet. The balance of the acquisition cost was met by borrowings by Z Energy.
The stake in NZ Refining was sold to Z Energy after the IPO for $100 million. The net outlay by Infratil and New Zealand Superannuation Fund for 100% of Z Energy in 2010 was effectively $320 million.
In 2011, the 226 Shell service stations were rebranded as Z Energy stations.
Z Energy had $430 million of retail bonds at March 2013, up from zero debt in 2010 when Infratil and NZ Super Fund acquired it.
IPO
Before the IPO
The majority of the Z Energy service stations are off-balance sheet. 152 service stations are leased by Z Energy from third parties and five are independently owned. Z Energy owns 56 service stations freehold. Z Energy sold and leased back 47 service stations in 2012-13 for cash proceeds of $87 million.
Z Energy revalued upwards its remaining property plant and equipment by 54% or $170 million to a total of $481 million in April 2013.
The company also paid dividends totaling $224 million to Infratil and the New Zealand Superannuation Fund in the three-year period before the IPO, including $70 million between April 2013 and the IPO.
IPO
In July 2013, shares in Z Energy were offered in an IPO which was priced at $3.50 per share. That IPO valued Z Energy at $1.4 billion. This value was almost four and half times the net cash outlay by Infratil and NZ Super Fund to acquire it three years earlier.
The IPO prospectus showed that Z Energy expected to declare total dividends to shareholders equivalent to 6 cents per litre of fuel sold in 2013-14. This includes dividends to be paid to Infratil and NZ Super Fund immediately prior to the IPO.
Tim Hunter, deputy editor of the Fairfax Business Bureau, said that in completing the IPO, Infratil and NZ Super Fund will "have pulled off a piece of exceptional business".
Z Energy issued a prospectus for its non-underwritten IPO on 25 July 2013. The IPO will raised $840 million from a mixture of shares sold by the current parent and new shares issued.
All of the proceeds went to Infratil and New Zealand Superannuation Fund, including funds raised by the issue of new shares in Z Energy Limited. Z Energy purchased the 17.1% stake in NZ Refining for $100 million from Infratil and New Zealand Superannuation Fund after the IPO.