By Ross Kelly
SYDNEY--The government of Australia's Northern Territory sold
its general insurance operations for 424 million Australian dollars
(US$368 million), the latest privatization of a state-owned asset
to raise funds for new infrastructure.
Germany's Allianz SE (ALV.XE) bought the insurance arm of
Territory Insurance Office, while Adelaide-based People's Choice
Credit Union bought its banking business, the government said.
Allianz has pledged to continue offering flood, storm surge and
cyclone cover to farmers as part of the deal.
It comes a day after Australia's federal government raised
A$5.68 billion from the sale of the country's top public health
insurer, Medibank Private, beating expectations for the largest
initial public offering of a government-owned asset here in nearly
two decades.
Conservative governments across Australia have said they are
keen to sell assets to raise funds for new infrastructure such as
airports. State governments, including in New South Wales and
Queensland, have sold billions of dollars worth of ports and toll
road assets in recent months.
"I want to assure Territorians that this is not a decision we
have taken lightly," Adam Giles, the Northern Territory's chief
minister said in a statement. "But the government believes it is
the best outcome for taxpayers because it reduces their exposure to
risk and frees up A$424 million in funds for the development of
Northern Australia."
Proceeds from the Territory Insurance Office privatization will
mostly go into a long-term infrastructure development fund, the
government said. The remainder will be available for flood
mitigation work, including the removal of an ambulance centre in
the town of Katherine out of a flood zone.
The Northern Territory government said it had also considered
selling the motor accidents compensation arm of TIO, which would
have raised the overall deal price to A$609 million, but decided to
keep it in public hands.
Write to Ross Kelly at ross.kelly@wsj.com
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