Westpac NZ becomes first bank to be able to secure and leverage customers’ Zespri shares.

Westpac NZ is the first New Zealand bank to receive approval from the RBNZ to secure and leverage kiwifruit growers’ Zespri shares. This means kiwifruit growers who become or are Zespri shareholders can use any Zespri shares they own as security when applying for lending, as well as access finance to support the purchase of additional shares.

Reuben Tucker, Westpac NZ Managing Director Institutional & Business Banking, says the move will make it easier for shareholding kiwifruit growers to secure finance.

“Funding the purchase or development of a kiwifruit orchard is a significant undertaking so we’re really pleased to be able to support our horticulture customers in this way.

“We think the move will be particularly helpful in situations where traditional security is insufficient, including where land cannot easily be mortgaged, such as whenua Māori land,” Mr Tucker says. 

Westpac NZ kiwifruit grower customers aren’t required to provide Zespri shares as security, but Mr Tucker says having the option will be beneficial.

“Structuring lending in a way that best suits the customer is something we’re really focused on so it’s great to be able to present this as another option for customers.

“Our country’s kiwifruit industry is currently in a really strong position, with export prices and volumes having continued to climb over the past few years.

“Given this context, we think our kiwifruit grower customers will be particularly welcoming of this additional flexibility in structuring debt to expand their operations or invest in a new project.

“We have a strong and enduring relationship with Zespri and are really pleased to be working with them to support the kiwifruit industry in this way.”  

Zespri Executive Officer Grower & Industry Tracy McCarthy says the move reflects the growing value of share ownership for kiwifruit growers.

“Grower ownership of Zespri is a core part of our industry structure, and we’re seeing more growers invest in Zespri shares.

“Total Zespri share value currently sits at around $1.8 billion and initiatives that help growers to better leverage that value have the potential to support further investment, growth, and resilience across the industry.

“This news is a positive development for our shareholders considering opportunities both on-orchard and beyond. It’s encouraging to see options emerging that recognise the value of Zespri share ownership and give growers greater flexibility when it comes to investing in their future.”

Colin Bond, CEO of advocacy body New Zealand Kiwifruit Growers Inc. (NZKGI) says, “NZKGI has been pushing for greater grower ownership of our industry, which is important for industry stability. While Zespri’s actions to increase their shareholding have been largely successful, there is still room for more growers to have a stake in their marketer. Initiatives such as this increase growers’ ability to access Zespri shares, providing additional certainty.”

Mr Tucker says conversations with customers at Fieldays reinforced the fact that New Zealand’s horticulture sector is well positioned to support the country’s economic recovery.

“The kiwifruit sector in particular plays a critical role in our economy and we’re really excited about this new arrangement with Zespri.

“We encourage both existing Westpac customers and anyone else interested in purchasing or developing a kiwifruit property to get in touch with us to chat about what the new arrangement could mean for them.”