Auckld, Manukau could collaborate on airport sale

22 August 2007

Media Release

Auckland - Manukau cities could collaborate on airport share sale

A sell down of Auckland Airport shares to create a $550 million capital fund for Auckland and Manukau cities while also retaining a 10% stake in the airport’s ownership, is worth thinking about, according to Auckland Chamber of Commerce Chief Executive Michael Barnett.

“If Manukau and Auckland cities worked together to sell 13% of their combined 23.25% shareholding in Auckland airport and retain the balance of 10.25% they would have the best of both worlds.”

- A capital fund of around $550 million would be created enabling both cities to fund major “must do” projects immediately and manage development long term without resorting to ratepayer pockets; and,

- Retaining a combined 10% plus stake in the airport would ensure that a local ownership was protected.

“By both councils combining to sell down some of their shares and retain a 10% stake, both cities would have access to a sizeable amount of cash while protecting their perceived strategic value of having some local ownership in the airport.”

Auckland City currently earns about $11.5 million annually from its shareholding, an after tax dividend yield of about 2.3%, according to City documents. “This is insignificant compared to what a capital fund of $550 million could generate and help sustain major projects long-term.”

“We have a wonderful opportunity to convert what is here already in the form of an under-used asset into something that is ambitious, big-picture and far-sighted for Auckland while also retaining some ownership in our airport,” concluded Mr Barnett.

ENDS

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