Heriot-Edievale.Com (Trading as Heriot-Edievale Limited)

Public Transport, Rail and Freight Advisory / Consultancy

The Transport / Rail Blog


KiwiRail Confirms Balance Sheet Restructure

Posted on June 26, 2012 at 8:31 PM
KiwiRail have today confirmed their asset writedown as previosuly foreshadowed in their half year report for 2012.
The press releases from the Crown followed by KiwiRails are as below:
Wednesday, 27 June 2012
Press Release: New Zealand Government
Hon Bill English, Minister of Finance
Hon Tony Ryall, Minister for State Owned Enterprises
Next steps in KiwiRail’s Turnaround Plan
The Government has today announced that KiwiRail’s balance sheet will be restructured in another step towards putting the company on a more commercial footing under its challenging Turnaround Plan.
“Under the plan, the Government is committed to ensuring KiwiRail can fund its business on a commercial basis,” Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall say.
There are two main parts of the restructure:
• New Zealand Railways Corporation will continue to hold the 18,000 hectares of rail network land, from which no financial return will be expected.
• From 1 January 2013, KiwiRail’s freight, passenger, infrastructure and ferry businesses, together with rolling stock, rail infrastructure and plant and equipment, will be transferred to a new state-owned enterprise.
KiwiRail’s land and network net assets will be written down from about $13.4 billion to about $6.7 billion. The Government has also confirmed it will convert $322.5 million of KiwiRail debt to equity.
“This will leave KiwiRail with a balance sheet that better reflects commercial reality and gives the company an opportunity to earn a return over time.
“After the previous government bought back the rail network infrastructure for $1 in 2004, the company’s assets – excluding land - were revalued upwards in 2007 by around $5 billion to reflect replacement cost.
“The changes we’re announcing today will allow the company to account and report in a way that more fairly reflects its commercially-focused rail and ferry business,” the ministers say.
Of the $6.7 billion net asset write down, about $4.9 billion will be covered by reversing an existing asset revaluation reserve. The remaining $1.8 billion will be written off.

The Government’s preferred position is that this is reflected in both the Crown’s and KiwiRail’s financial statements for the year ending 30 June 2012.
“Under that approach, the $1.8 billion write off would be added to the Government’s operating deficit for the current financial year. The final position will be confirmed over the next few months before the annual accounts are published,” the ministers say.
“However, because it is a non-cash write down, it will not affect the level of core Crown net debt and the Government’s borrowing programme will not change.”
The ministers stress that KiwiRail’s Turnaround Plan remains a difficult task.
“While good progress has been made in lifting freight volumes, there is no doubt KiwiRail has a long way to go before it achieves the Government’s objective of supporting itself.
“We remain focused on giving it the opportunity to do this within clear fiscal parameters, so we can recover value from the cost we inherited from the previous government.”
The Kiwi Rail press release is here
KiwiRail Confirms Balance Sheet Restructure  27 June 2012

At KiwiRail’s Annual Public Meeting in November 2011, we outlined our intention to make a change to the Balance Sheet that would reflect a standard commercial valuation approach.

We are pleased to confirm our shareholder (the Crown) has supported this change and are now putting in place the needed technical and legal process for it to proceed.
“Consistent with our indicative outline last year, the commercial arm of KiwiRail will carry assets valued at approximately $1.1 to $1.3 billion, reflecting the revenue they generate, rather than the current value of approximately $7.8 billion,” said KiwiRail Chairman John Spencer.
“This is a much more realistic valuation of the company’s assets which will greatly assist KiwiRail in meeting its commercial objectives and provide more discipline in driving improved performance. We are amending our accounting methods to align to those objectives."
”To enable this change a new State Owned Enterprise (SOE) will be created which will own and operate the rail and Interislander businesses under the existing KiwiRail brand. Crown land held for rail purposes will be retained by New Zealand Railways Corporation (NZRC) and made available for use by KiwiRail.
According to Chief Executive, Jim Quinn, staff and customers won’t experience any change to their current situations.“It will be business as usual for our relationships with customers and stakeholders, and our staff will simply be transferred with all their current entitlements to the new SOE,” said KiwiRail Chief Executive, Jim Quinn.
Further background
The revaluation of the assets to be vested in the new KiwiRail SOE is expected to result in a write-down in the net value of those assets, estimated to be approximately $6.7 billion. NZRC has revaluation reserves of approximately $5 billion, which would be written off first as a result of a write-down in the assets’ value. Any write down in excess of $5 billion would affect NZRC’s bottom line.
As the KiwiRail Board now consider the assets to be held primarily to generate profits, and are managing them on that basis, the write-down of assets will occur in the accounts for the year ended 30 June 2012. The final amount of the write-down will be determined after independent valuations are completed, approved by the Board and disclosed in the year end accounts.
The company will work with the Government to use a statutory process under existing legislation to vest the new KiwiRail SOE with all the rail and ferry operating assets and liabilities of NZRC (other than Crown land).
The composition of the Boards of the new KiwiRail SOE and NZRC has not yet been determined but they are expected to include a majority of common directors.

Categories: None

Post a Comment


Oops, you forgot something.


The words you entered did not match the given text. Please try again.


Reply chrome hearts outlet
8:11 AM on January 7, 2022 
I truly wanted to construct a simple comment in order to express gratitude to you for some of the fantastic techniques you are giving at this site. My time consuming internet lookup has finally been rewarded with good quality suggestions to write about with my family members. I 'd express that we site visitors are unquestionably fortunate to dwell in a very good community with many special individuals with very beneficial plans. I feel truly privileged to have encountered your webpage and look forward to really more cool moments reading here. Thanks again for a lot of things.
chrome hearts outlet http://www.chromehearts.com.co
Reply yeezy 350 v2
8:12 AM on January 7, 2022 
I simply wanted to jot down a simple comment to express gratitude to you for some of the magnificent information you are writing on this website. My long internet research has now been honored with brilliant information to go over with my companions. I would express that most of us website visitors are very much lucky to exist in a really good website with many awesome individuals with very beneficial tactics. I feel truly blessed to have encountered your entire web page and look forward to many more fun minutes reading here. Thanks once again for everything.
yeezy 350 v2 http://www.yeezy350v2s.com
Reply yeezy boost 350
8:14 AM on January 7, 2022 
I precisely needed to thank you very much yet again. I'm not certain what I would have gone through in the absence of those techniques discussed by you regarding such area of interest. It actually was the depressing difficulty in my position, but observing the specialised way you treated it made me to jump over joy. I'm happier for this service as well as expect you realize what an amazing job you're putting in training the rest through your web blog. I am sure you haven't come across all of us.
yeezy boost 350 http://www.yeezy350s.com
Reply lebron shoes
7:31 PM on January 8, 2022 
I not to mention my buddies were found to be reading the nice tactics on your web blog while the sudden got an awful suspicion I never thanked the web blog owner for those strategies. Most of the men happened to be as a result joyful to study all of them and now have extremely been enjoying them. Appreciate your getting indeed thoughtful and then for deciding upon some magnificent resources most people are really desirous to discover. My personal honest regret for not expressing appreciation to you sooner.
lebron shoes http://www.lebronjames-shoes.us.com
Reply moncler
7:32 PM on January 8, 2022 
I want to express my appreciation to you for bailing me out of this particular issue. After exploring throughout the online world and finding basics which are not pleasant, I figured my life was over. Being alive devoid of the solutions to the problems you've sorted out through your good short article is a crucial case, as well as the kind which might have in a wrong way affected my career if I had not encountered your website. Your good talents and kindness in dealing with every part was tremendous. I am not sure what I would have done if I had not discovered such a point like this. I can at this time look forward to my future. Thanks for your time very much for your skilled and sensible guide. I will not think twice to refer the website to any person who requires assistance about this issue.
moncler http://www.monclersoutletstore.com
Reply jordan 12
7:33 PM on January 8, 2022 
I'm commenting to let you be aware of of the fantastic experience my cousin's child experienced reading your web page. She mastered such a lot of pieces, which included what it is like to have a very effective giving spirit to get many more clearly know precisely selected complex subject matter. You really exceeded her expected results. I appreciate you for providing these helpful, dependable, explanatory and even unique guidance on your topic to Ethel.
jordan 12 http://www.jordan12.us.com
Reply golden goose
7:34 PM on January 8, 2022 
My spouse and i were very lucky Chris managed to do his researching out of the precious recommendations he obtained from your very own web pages. It's not at all simplistic to simply possibly be giving away strategies men and women have been making money from. And we remember we now have the writer to give thanks to because of that. The entire explanations you made, the simple site menu, the friendships you will make it easier to instill - it is most extraordinary, and it is assisting our son and the family believe that this theme is excellent, and that is truly pressing. Many thanks for all!
golden goose http://www.goldengooseofficial.com
Reply birkin bag
1:29 AM on January 10, 2022 
I precisely wished to thank you so much again. I'm not certain what I could possibly have undertaken without the type of opinions provided by you directly on my field. It truly was a real fearsome circumstance in my circumstances, however , seeing a new skilled form you processed the issue made me to weep with joy. I'm just happy for the work and hope you are aware of a great job you are undertaking training men and women by way of your webpage. I know that you've never encountered all of us.
birkin bag http://www.birkinbag.us.com
Reply yeezy supply
1:30 AM on January 10, 2022 
I definitely wanted to write down a simple note to say thanks to you for these remarkable guides you are giving out on this website. My time intensive internet lookup has finally been compensated with extremely good points to exchange with my guests. I would repeat that most of us readers are undeniably fortunate to be in a very good community with many marvellous professionals with interesting opinions. I feel truly happy to have encountered the webpage and look forward to tons of more brilliant moments reading here. Thanks a lot once more for a lot of things.
yeezy supply http://www.supplyyeezys.com
Reply hermes
8:20 AM on January 11, 2022 
I simply wanted to thank you very much once more. I am not sure what I would've accomplished in the absence of these strategies discussed by you on such question. This has been a real frightful issue in my view, but understanding a skilled approach you handled the issue forced me to weep with happiness. I'm just happier for the information and wish you really know what a great job you were carrying out teaching the mediocre ones by way of your webpage. Most probably you have never encountered all of us.
hermes http://www.hermes-handbags.us.com
Reply yeezy boost 350
8:22 AM on January 11, 2022 
A lot of thanks for each of your hard work on this website. My mom delights in setting aside time for investigations and it's really easy to understand why. We hear all of the lively tactic you make valuable things through this web blog and as well inspire response from some others on that area of interest plus my princess is really starting to learn so much. Have fun with the remaining portion of the year. You are always performing a brilliant job.
yeezy boost 350 http://www.yeezy350boost.us.com
Reply golden goose sneakers
8:23 AM on January 11, 2022 
Thank you for your entire efforts on this web site. My niece enjoys participating in research and it's easy to understand why. A lot of people know all regarding the compelling tactic you convey useful steps via your web site and therefore welcome response from other ones on that matter then our favorite simple princess is undoubtedly learning a lot of things. Take pleasure in the remaining portion of the new year. You're the one carrying out a remarkable job.
golden goose sneakers http://www.goldengooseshoes.us.org
Reply supreme new york
5:44 PM on January 12, 2022 
I precisely wished to appreciate you all over again. I do not know the things I would've sorted out without these thoughts contributed by you over this field. It absolutely was an absolute horrifying situation for me, but discovering your specialised approach you managed it took me to cry for joy. Now i'm grateful for this advice as well as sincerely hope you are aware of a great job you are getting into instructing the rest thru your web site. I'm certain you haven't got to know any of us.
supreme new york http://www.supremeclothingstore.com
Reply adidas yeezy
5:46 PM on January 12, 2022 
I as well as my pals happened to be reviewing the good solutions located on the blog while suddenly developed an awful feeling I had not expressed respect to the blog owner for those tips. All the ladies happened to be as a result passionate to learn all of them and have definitely been using these things. Thank you for getting considerably helpful and for selecting some very good ideas most people are really desirous to know about. Our sincere regret for not expressing appreciation to you earlier.
adidas yeezy http://www.adidasyeezyboost350.us.com
Reply curry shoes
12:50 AM on January 14, 2022 
I wish to express some thanks to the writer just for bailing me out of this problem. After searching throughout the online world and obtaining tricks that were not pleasant, I was thinking my entire life was gone. Living devoid of the strategies to the problems you have fixed through the short article is a critical case, as well as the kind that could have adversely damaged my entire career if I hadn't noticed your web site. Your primary know-how and kindness in touching every aspect was very helpful. I'm not sure what I would have done if I had not encountered such a thing like this. I can at this moment relish my future. Thanks very much for this impressive and results-oriented guide. I won't hesitate to recommend your web blog to any person who desires counselling on this subject.
curry shoes http://www.stephcurryshoes.com
Reply off-white
12:51 AM on January 14, 2022 
I needed to draft you this very small note to help give many thanks once again for all the magnificent suggestions you have discussed above. It's really surprisingly generous of you to grant extensively precisely what a lot of people would've marketed as an ebook to help with making some cash for their own end, especially considering that you might have done it in the event you desired. Those thoughts also acted like the easy way to fully grasp that most people have similar passion much like my personal own to learn way more with respect to this issue. Certainly there are several more pleasurable times ahead for people who look into your site.
off-white http://www.off--white.us.com
Reply kyrie 6
11:26 AM on January 15, 2022 
Thanks for your own effort on this site. Debby takes pleasure in making time for research and it is easy to see why. My spouse and i learn all relating to the compelling ways you deliver simple guides through the blog and even improve participation from people on this article and our girl is really studying a great deal. Take advantage of the rest of the year. You have been carrying out a very good job.
kyrie 6 http://www.kyrie-6.com
Reply off white
11:30 AM on January 15, 2022 
Thanks for all of the work on this blog. Kate take interest in making time for investigations and it is easy to understand why. A lot of people notice all relating to the compelling method you present rewarding steps by means of the web site and foster participation from the others on this situation and our simple princess is in fact understanding a lot. Enjoy the remaining portion of the year. You're the one performing a wonderful job.
off white http://www.offwhites.us.com
Reply kobe sneakers
5:47 AM on January 17, 2022 
I would like to get across my gratitude for your generosity supporting people who really need guidance on that topic. Your very own dedication to passing the solution across appeared to be remarkably significant and has consistently helped others much like me to achieve their ambitions. Your helpful recommendations indicates much to me and far more to my colleagues. Thank you; from everyone of us.
kobe sneakers http://www.kobesneakers.com
Reply lebron 18
5:48 AM on January 17, 2022 
I simply needed to appreciate you once more. I do not know what I could possibly have undertaken without the points shared by you concerning such subject matter. It actually was a very traumatic condition for me, but spending time with this specialized form you managed the issue took me to leap with gladness. Extremely happy for your information and even sincerely hope you find out what an amazing job you're getting into training the others by way of a web site. I know that you haven't got to know all of us.
lebron 18 http://www.lebron18.us