45% of Napier could be sold to fund growth
Hawke’s Bay Regional Council could sell up to 45% of Napier Port in New Zealand to fund the port’s growth requirements, while retaining majority ownership and balancing the council’s investments.
Regional Council Chair Rex Graham said he believes floating a 45% stake of the port on the New Zealand Stock Exchange was the best option for the people and economy of Hawke’s Bay, though Council, which owns the port on behalf of ratepayers, had a very open mind to other options.
“This option would clear the Port’s $86 million of debt, from which point it will be able to self-fund its growth. This option funds the Port’s growth, allows locals to maintain ownership and control, provides an opportunity to invest directly in our Port and does not require more money from ratepayers.
“Additionally, the Port currently makes up three quarters of the Regional Council’s revenue-generating assets. This is poor risk management. A minority share float allows Council to diversify investments while benefiting from continuing to own a strong commercial asset.”
The proposal is one of four suggestions in a consultation document by the council, which needs NZD$320-350m over 10 years for it to support the growing Hawke’s Bay economy.
The council’s states a preference for a sharemarket listing of up to 49% of the port. Funding the port’s growth via rates would see average rates rise by 53% over the next year, Mr Graham said.
More borrowing would lead to unmanageable debt, but the port has experienced a 25% increase in cargo volumes over the last two years and needs to expand its capacity and invest in new infrastructure, including a new NZD$142m wharf by the end of 2022.
The chair of Napier Port, Alasdair MacLeod, said the Board supports the Regional Council’s decision to consult on the ownership structure of Napier Port.
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