New Zealand Post, the troubled government-owned postal service, said it intends to sell 45 percent of subsidiary Kiwibank for NZ$495 million ($337 million) to pay down debt.

The New Zealand Superannuation Fund will take 25 percent and Accident Compensation Corp. 20 percent, ensuring Kiwibank remains 100 percent in government hands, NZ Post said in Wellington Wednesday. The deal is conditional on due diligence and a final decision will be made by June 30.

The announcement comes as NZ Post struggles to cope with declining letter volumes and fires staff. Selling the stake in profitable Kiwibank will allow NZ Post to bolster its financial position as it transitions to a parcel-courier business while also giving the bank a better chance of growing to its potential, NZ Post Chairman Michael Cullen said.

“We believe now is the right time to broaden the bank’s support base within the wider public sector, and this provides the NZ Super Fund and ACC with a rare opportunity to secure a significant minority stake in a large and well-performing unlisted New Zealand business,” Cullen said in a statement. “The proceeds would allow New Zealand Post to invest in its core parcels, packages and letters business and pay down debt. It is anticipated that a special dividend would also be paid to the Crown.”

The sale values Kiwibank -- the state-owned lender launched by the Labour-led government in 2002 -- at NZ$1.1 billion.

Finance Minister Bill English said the proposal includes a right of first refusal for the government over any future sale of shares, “which we would exercise" to ensure the bank stays 100 percent government-owned.

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