UDC Finance

Last updated

UDC Finance
Industry Financial services
Founded1938
FounderOtto Simon Heymann
Headquarters
Auckland
,
New Zealsnd
Key people
Wayne Percival (CEO)
Services Asset-backed finance
Revenue$137 million (2018)
$65 million (2018)
Parent Shinsei Bank

UDC Finance Limited is a finance company in New Zealand. UDC's main expertise is now in providing asset-backed finance for plant, vehicles and equipment, where they do not rely on land or buildings as security. It is a subsidiary of Shinsei Bank.

Contents

History

UDC was founded in 1938 as Financial Services Limited by Dr Otto Simon Heymann. [1] In May 1938 Financial Services was the organiser and sponsor of the flotation of Todd Motors Corporation. [2] Government policy of the day prohibited the issue of new banking licences so Financial Services obtained registration as a moneylender in August 1938 [3] and began investing in hire purchase contracts with a special interest in New Zealand's secondary industry. [4]

In order to establish international ties and better access to capital for New Zealand businesses London based banker United Dominions Trust was invited to purchase a shareholding. UDT took ownership of almost all Financial Services' capital in 1951. Financial Services was renamed United Dominions Corporation (South Pacific) Limited in 1954. [5] On one of his pastoral visits UDT's founder convinced national representative rower Alexander Ross, deputy-Governor of the Reserve Bank of New Zealand, to join him in London where Ross later became chairman of UDT. In his 18 years in London Ross shifted UDT's activities so in the 1970s the majority of UDT profit came from banking and industrial finance. [6]

This strategy to bring in foreign investment soon proved to have been a mistake. New Government regulations severely restricted expansion by foreign-owned companies. However the government partly relaxed its regulation of trading banks and finance houses in the 1960s allowing United Dominions Trust to sell 20% of its shares. UDC's own trading bankers, the Bank of New Zealand, did not take up the opportunity but elected to set up their own operation, BNZ Finance. The 20% shareholding was purchased by Australia & New Zealand Banking Group in 1965. [5]

In 1970 UDC sold its 80% interest in by floating and listing the company on the NZX. ANZ became the major shareholder with 72%, taking full ownership in 1980 and delisting UDC from the NZX. [5]

An affiliate of the HNA Group agreed to buy UDC in 2017. [7] [8] However the sale was not completed after the Overseas Investment Office refused to approve it, citing uncertainty over HNA's ownership structure. [9] [10] In March 2018 ANZ announced it was considering refloating UDC on the NZX, [11] but later decided not to proceed with this. [12] [13]

In June 2020 Shinsei Bank agreed terms to purchase UDC for NZ$762 million (US$480 million) making it Shinsei's biggest overseas acquisition to date. [14] [15] The sale was completed in September 2020. [16]

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References

  1. ↑ Evening Post 18 April 1938 page 10
  2. ↑ The Press 17 May 1938 page 15
  3. ↑ Evening Post 30 March 1938 page 4
  4. ↑ Evening Post 26 November 1941 page 4
  5. 1 2 3 Financing the Future for 70 Years UDC Finance
  6. ↑ Obituary, Sir Alexander Ross The Times 14 April 1994 page 19
  7. ↑ ANZ announces sale of UDC Finance UDC Finance 11 January 2017
  8. ↑ China's HNA extends reach to NZ with $460 mln purchase of non-bank lender UDC Reuters 11 January 2017
  9. ↑ ANZ sale rejected on ownership uncertainty The West Australian 21 December 2017
  10. ↑ UDC sale to HNA not proceeding UDC Finance 12 January 2018
  11. ↑ ANZ to explore IPO as part of strategic options for UDC UDC Finance 20 March 2018
  12. ↑ Update on UDC strategic review 'UDC Finance 31 October 2018
  13. ↑ ANZ says it will not pursue public float of NZ' UDC New Zealand Herald 31 October 2018 accessed 3 February 2019
  14. ↑ ANZ announces sale of UDC Finance Australia & New Zealand Banking Group 2 June 2020
  15. ↑ Umekawa, Byron Kaye (2 June 2020). "Shinsei to buy New Zealand's UDC Finance for $480 million, its largest overseas deal". Reuters.
  16. ↑ UDC Finance sale to Shinsei Bank completes Australia & New Zealand Banking Group 1 September 2020
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