The state government’s asset sales program has taken a step forward today, with Gresham Advisory Partners appointed as lead adviser for the partial sale of Keystart’s loan book.
About 40 per cent of the loan book will be sold, with a nominal value of $1.6 billion, although it is anticipated that sale proceeds would differ from that figure.
Keystart provides loans to disadvantaged Western Australians who are unable to meet the depost requirements of mainstream lenders.
It comes just a day after international ratings agencies downgraded long-term WA state government debt to an Aa2 level, below that of Tasmania.
That followed the December mid-year budget projections statement, which flagged net debt would reach as high as $39 billion towards the end of the decade.
The Keystart partial sale is one of a series of items announced in the 2015 state budget, which taken together were expected to raise between $3 billion and $5 billion to reduce debt levels.
The most substantial contributor was Fremantle Ports, the sale of which it is estimated would be worth more than $2 billion.
"This is an important milestone in the government's asset sales program and the partial sale of Keystart's loan book will reduce gross debt.
“This initiative will not change the service levels or terms and conditions for existing Keystart customers and will not impact upon Keystart's existing interest rate setting policy, lending eligibility criteria or rigorous loan assessment process."
As well as Gresham, other key advisers on asset sales are Rothschild and Deloitte, which were appointed as lead advisers for the port sale in June 2015, and EY, which led the sale of the Perth Market Authority.
Business News also understands the Perth Market Authority sale will soon be finalised, possibly as early as this week, after an industry consortium known as Perth Markets was selected as prefered bidder in December.