March 19, 2018 / 9:15 PM / 4 months ago

UPDATE 2-ANZ explores listing of NZ vehicle finance unit after HNA sale failure

* ANZ says exploring options including IPO, decision in months

* Deutsche Bank is leading the IPO efforts - source

* IPO likely to be well received - fund manager (Adds valuation, fund manager comment, Deutsche Bank leading IPO effort)

By Paulina Duran and Marius Zaharia

SYDNEY/WELLINGTON, March 20 (Reuters) - Australia and New Zealand Banking Group said on Tuesday it is considering an initial public offering (IPO) of its New Zealand-based vehicle finance unit UDC, following the failed sale of the NZ$660 million ($477.8 million) business to China’s HNA Group.

ANZ New Zealand Chief Executive David Hisco said while there was no immediate need to make a decision, “it makes sense to keep examining a broad range of options for UDC’s future.”

That included a sale to another party and the option of retaining the business, which is New Zealand’s largest non-bank lender, Hisco added.

“The range of strategic options we have for UDC, including approaches we have received regarding the business and the option of retaining it, will take a number of months to examine before any decision is made,” Hisco said in a statement.

Matt Goodson, managing director at Salt Funds Management in Auckland, said he expected a listing would see strong interest from institutions and retail investors.

“New Zealand has little in the way of financial listings at the moment, so for a fair price and given its reasonable size, there will be strong interest across the board,” Goodson told Reuters.

ANZ dropped plans to sell UDC, which provides funding for plant equipment, vehicles and machinery, to HNA Group after the New Zealand government blocked the deal in December over concerns about the Chinese conglomerate’s ownership structure. The deal had been agreed nearly a year earlier as part of ANZ’s efforts to shed capital-intensive assets.

A sale would have added about 10 basis points to its core equity capital, ANZ said at the time.

Deutsche Bank, which handled the failed sale process, is also handling the IPO efforts, a source with knowledge of the deal said. The source requested anonymity because the process was private.

$1 = 1.3812 New Zealand dollars Reporting by Paulina Duran in Sydney, Marius Zaharia in Wellington and Aditya Soni in Bengaluru. Editing by Jane Wardell and Stephen Coates

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