By Lucy Craymer

The New Zealand Refining Company Ltd.’s Marsden Point facility, the country’s only oilrefinery, is pictured Friday, September 30, 2005.
Bloomberg News

Fuel supplier Z Energy is set to become the latest company to list in New Zealand as the benchmark index nears record levels. 

Current owners Infratil Ltd. and New Zealand Superannuation Fund confirmed earlier Thursday they plan to raise up to 900 million New Zealand dollars ($714.8 million) by offering between 50% to 60% of Z Energy with an initial price indication of 3.25 New Zealand dollars to 3.75 New Zealand dollars a share.

This would value the whole company at about 1.5 billion New Zealand dollars, which is more than the 696.5 million New Zealand dollars the two companies paid Royal Dutch Shell PLC for Z Energy in 2010.

“Over the last three years, Z has responded well to increased capital investment, successfully re-branding and placing a strong focus on customer service,” said New Zealand Superannuation Fund spokesperson Stewart Brooks.

As Z Energy is readied for an IPO, New Zealand’s economy has been faring better than many of its developed-nation counterparts, with nine quarters of consecutive growth and ongoing low interest rates, which makes the New Zealand equity market look attractive. The NZX-50 index is currently just 2.2% below the record high it reached on May 14.

After a dearth of new listings over the last four years, six new companies have already listed on the market in 2013, including Snakk Media and Synlait Milk .  Furthermore Mighty River Power , which raised 1.7 billion New Zealand dollars from the sale of a 49.9% stake, was the largest ever initial public offering in New Zealand. When the government partially lists Meridian Energy later this year, the offer is expected to break the Mighty River record.

“It all is looking pretty good and there is a pretty healthy appetite for new listings in the market,” said Hamilton Hindin Greene broker Grant Williamson.

But it remains to be seen if Z Energy can capitalize on demand for new listed companies, particularly those with a New Zealand brand.

“It’s something we don’t have on the market, it is something different. It is very much going to be sold on dividend yield, which investors are still chasing pretty hard,” said Mr. Williamson.

Z Energy supplies about a third of New Zealand’s transport fuels. It owns a 17.1% stake in New Zealand’s only oil refinery – New Zealand Refining (NZR.NZ), as well as more than 200 gas stations and truck stops, pipelines and storage infrastructure around the country. Its clients include airlines, trucking companies, mines, vehicle fleet operations and shipping companies.

Z Energy expects a net profit of 163 million New Zealand dollars in the year ending Mar. 31 2014 and revenue of 2.96 billion New Zealand dollars, according to forecasts from its prospectus.