Australia to sell insurer Medibank Private in IPOStaff writer ▼ | Wednesday March 26, 2014 9:00AM ET
The Australian government said it will sell state-owned health insurer Medibank Private in a public float, which local media have tipped could fetch about A$4 billion ($3.76 billion), but the structure of the sale was yet to be decided.
The decision follows a lengthy study which found that taking the company public would improve competition in the health insurance industry, Finance Minister Mathias Cormann said. Australia's federal and state governments are pursuing an aggressive strategy of selling off state-owned assets to pay down debt and fund investment in roads and other infrastructure projects.
"Our stated intention is to recycle the capital that is thrown up from the sale of Medibank to invest in productivity and infrastructure," Mr. Cormann told reporters.
Medibank would rank among the biggest Australian floats of the year, alongside hospital operator Healthscope, which owners TPG Capital and The Carlyle Group are plans floating for an estimated A$5 billion.
The government plans to sell Medibank in the 2014-2015 financial year but "the precise time is yet to be decided", Mr. Cormann said, adding the sale will still ultimately depend on market conditions. ■