Fairfax Media is proposing to sell up to 35 percent of online auction site Trade Me via an initial public offering as part of a plan to raise cash to pay down some of its debts.
The site that made Sam Morgan a multimillionaire was sold to Fairfax five years ago for $700 million, and remains New Zealand's largest online auctions and classifieds business.
The IPO remains subject to financial market conditions, but if it goes ahead Trade Me would become a standalone, publicly listed company on the NZX and potentially the ASX.
Greg Hywood, Fairfax chief executive and managing director, said the company intended to sell between 30 and 35 percent of Trade Me, applying proceeds to reduce debt.
The decision was made after a recent strategic review of Fairfax’s portfolio of assets, he said.
Fairfax posted a net loss after tax of A$400 million after writing down $650 million in restructuring costs.
"The decision to pursue the IPO of Trade Me is a further step in reshaping the Fairfax portfolio and adopting a more flexible corporate structure to maximise shareholder value. Importantly, Fairfax will continue to benefit from the strong growth profile of Trade Me through a shareholding of at least 65 percent."
He said Trade Me was now large enough to operate as a separately listed company and would benefit from the increased public profile, independent access to capital, and opportunity for direct investment by New Zealand investors.
Former Fairfax chief executive and All Black captain David Kirk will serve as the non-executive chairman of Trade Me.
In a statement, Trade Me said: "It is all business as usual from Trade Me’s perspective. The way Trade Me works, and our focus on providing a safe and trusted marketplace for Kiwis to buy and sell will remain the same."
Fairfax announced the proposal via a notice to the ASX this morning.