19 September 2007

Council reserves response on Auckland Airport

Manukau City Council will wait for the CPP Investment Board's formal proposal for a stake in Auckland International Airport Limited (AIAL), before deciding any possible response.

CPP Investment Board this morning confirmed it would be making a proposal to AIAL for a significant minority stake in the airport company.

Manukau Mayor Sir Barry Curtis says the council is in the midst of public consultation on the airport shares, with a Statement of Proposal detailing the objectives the council will use to evaluate any proposal that might be put forward.

"While the CPP Investment Board has stated it will put forward a proposal, we have yet to see anything formal," Sir Barry says.

"We also need to see what our ratepayers think about the criteria we would use to measure any proposal. Submissions to this close on 19 October.

"The new council will consider the submissions to the Statement of Proposal at the end of October. Once that process has been undertaken, the council will be in a position to make a decision on whatever proposal that might be in front of it at that time.

"The council has already stated that it intends to hold its shareholding in this strategic regional and national asset. What proposal CPP Investment Board, or any other party, might put forward in the future will be evaluated in light of this intent and the results of the consultation," Sir Barry says.

The proposed objectives are:

Strategic:

the council should maintain its present level of ownership

* the company must be committed to, and able to deliver on, the development of the airport

* the company not pursue strategies that risk dilution of the council's shareholding Financial:

* generate improved financial results (increase future dividends and possibly free up capital) for the council Commercial:

* there should be no single controlling shareholder (a controlling shareholder would probably have more than 30 to 35% of the shares)

* the council should be able to appoint a Board member, (appointed for his or her ability to contribute to the forward direction and governance of the airport company and in line with the council's policy the director would not be a councillor or officer of the council) Liquidity:

* the company should be listed on the New Zealand Stock Exchange (NZX) Overseas Ownership;

* no single overseas owner with a controlling interest (there will of course be a number of smaller overseas shareholders).

ENDS

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