- Rural Finance Corporation divested as part of the 2014-15 State Budget
- $400 million return to be invested in infrastructure to build a better regional Victoria
The Victorian Coalition Government has signed a heads of agreement for the sale of Rural Finance Corporation (RFC) business to Bendigo and Adelaide Bank (Bendigo) for a net return of approximately $400 million.
Treasurer Michael O’Brien and Deputy Premier Peter Ryan said the Victorian Coalition Government was satisfied that the conditions of the agreement, combined with Bendigo’s extensive experience and positive reputation for rural finance, meant that this was the right opportunity for this divestment.
“RFC has a proud history as a government-owned agribusiness specialist lender in Victoria and together with Bendigo and Adelaide Bank, have a wonderful cultural fit in terms of community banking that serves rural and regional Victoria,” Mr O’Brien said.
“Following a comprehensive review and a market process, the Coalition Government has determined that RFC customers, and broader regional communities, will benefit from these two organisations joining forces.
“RFC customers will now have access to not only existing products and services, but the broader banking service of one of the country’s most respected, community-based banks.
“In the conditions of this sale we have also ensured that non-commercial programs such as Young Farmers Finance Scheme, Natural Disaster Relief and Recovery Arrangement programs will all be maintained on the same terms,” Mr O’Brien said.
Mr Ryan said that the announcement was a win for Victoria’s diverse rural and agribusiness sector which would get better and more convenient access to RFC products and services, as well as regional Victoria generally as the proceeds were invested back into regional communities.
“The Coalition Government has made sure customers and staff will be looked after in this change of ownership,” Mr Ryan said.
“RFC staff will be employed by Bendigo on the same or better conditions, and there will be no forced redundancies.
“Customers will also benefit from this decision. RFC currently has 11 shop fronts and when the transition is complete, RFC customers will have access to 276 Bendigo Bank branches right across the state.
“Combining the business’s current products with those of a private bank will create a one-stop shop so regional customers can access more banking products and services.
“Today’s announcement also means that the Coalition Government can boost our investment in job creating infrastructure projects in regional Victoria, such as the historic Murray Basin Rail Project,” Mr Ryan said.
Net proceeds of the RFC divestment will be earmarked for investment in new productive infrastructure in rural and regional Victoria.
Mr O’Brien said the sale is expected to be bolstered by the Commonwealth Government’s asset recycling initiative.
“The Commonwealth’s financial incentives for the recycling of state assets into productive new infrastructure will further support our record infrastructure investment program,” Mr O’Brien said.
“We are about to embark on a significant infrastructure program and the proceeds of this divestment, together with the Commonwealth’s contribution, will be invested directly back into new job-creating infrastructure.
“We welcome the Commonwealth Government’s asset recycling initiative, which has been an influential factor in the decision of the Victorian Coalition Government to divest RFC.
“The most productive use of these funds is not sitting in the State’s books, but to have it invested into productivity enhancing infrastructure in rural Victoria, that will create jobs and boost our regional transport and export capacity.
“The value attributed to RFC by Bendigo and Adelaide Bank reflects the high quality of the RFC business. I wish to thank and pay tribute to the RFC board, led by Chairperson Sonia Petering, and its staff, led by Chief Executive Officer Rob Goudswaard, for their outstanding work which has helped to build the RFC business into what it is today,” said Mr O’Brien.
Key conditions placed on the sale include: there will be no forced redundancies of employees and employees will be offered employment with the new owner for a minimum of three years and on no less favourable terms and conditions; RFC products and brand are to be maintained for a minimum of three years; and offices or branches in the current 11 locations operated by RFC are to be maintained for a minimum of three years, including its head office in Bendigo.
RFC ownership will transition to the Bendigo and Adelaide Bank from early to mid-July 2014, pending APRA approval.
Media contact: Les White 0409 805 122 firstname.lastname@example.org (Deputy Premier)