Manukau City Council to retain airport shareholding
Manukau City Council has voted unanimously to retain its Auckland International Airport Limited shareholding.
Mayor Len Brown told today’s Extraordinary Council Meeting that the airport and its shareholding is a highly important issue for Manukau.
“I have heard so much about this issue over the past 12 months. We have received 552 submissions and the support is 90 per cent to 95 per cent to hold on to our shares,” Mr Brown said.
The airport is a strategic public asset, along with water, power, rail and seaports.
“It is strategically important to hold it in New Zealand hands, and particularly because this highly significant asset is in our back yard. It is generates huge benefits to the city.
“As a major employer in the city, and a vital transport hub for the city, region and country, the airport’s continued development is vitally important to us.”
Manukau City Council would have significant input into the rail links to be developed between the airport and the rest of the region.
Mr Brown said people are also aware of the importance of the airport’s property portfolio.
“Our shareholding will see Manukau having an influence on the long-term plans and the growth of the company.”
The community was looking to the council to retain a strong hold on such a public asset, and it was for the council to assess how it would consider how to grow the company and grow the returns.
Manukau City Council adopts amendment to Long-term Plan
Airport investment management strategy approved
Manukau City Council has approved its amendment to its Long Term Council Community Plan, which sets out a strategy to manage the council’s 10.05 per cent holding in Auckland International Airport Limited.
The council has carried out public consultation on the amendment, with 552 submissions made, the majority of which were in favour of the strategy.
Mayor Len Brown says it is important to the community that the council retains its shareholding.
“As a major employer in the city, and a vital transport hub for the city, region and country, the airport’s continued development is the council’s objective,” he says.
The strategy provides the council with the basis to consider any offers made for the company. At this stage, the council has not received any formal offers.
“Clearly, the proposed CPPIB take-over offer meets some of the council’s criteria but not others. The council will consider the detail of any CPPIB offer once it is received.
The full text of the strategy is attached.
Media release issued by Manukau City Council, Phone: 09 262 5223
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The proposed objectives in the strategy 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).
Background
Manukau City Council owns a 10.05% (122,747,646 shares) shareholding in Auckland International Airport Limited. Manukau City Council became an original shareholder of AIAL in 1988 on corporatisation of the airport. At that time the airport was owned jointly with the Crown holding 50% of the shareholding and the Auckland local authorities each having individual shareholdings totalling 50%. Later the Crown increased its shareholding to 51.6% after acquiring the small shareholding of Papakura District Council.
In 1998 AIAL was listed on the New Zealand Stock Exchange. All local authorities, with the exception of Manukau, have either partially or fully sold their shares in the airport. Manukau was the only local authority to increase its shareholding.