Airport Shares Sale To Go In Annual Plan
April 18, 2002
Auckland City will include a proposal to sell its shares in Auckland International Airport in the council’s draft annual plan in spite of a positive half-year result and this week’s record share price of $4.56.
Chairman of the council's Finance and Corporate Business Committee Douglas Armstrong says the council should not be in the business of share trading with ratepayers’ money.
"The Auckland City Council is not a financial institution and we shouldn't be in the position of holding assets when we are building up debt. It is not our job to speculate on the market and it’s a good time to sell when shares are at a good price.
"The expectation of the future performance of the company is already built into the current share price.
"There is no doubt that we have seen substantial gains in the past and now is the time to realise that gain and use the proceeds for the benefit of the community.
"The council sold commercial property to make the substantial investment in, for example, the Viaduct Harbour, and selling our airport shares to invest in much-needed infrastructure and community assets is no different to that," says Councillor Armstrong.
Proceeds from the sale of Auckland City's 25.7 per cent shareholding in the airport will be used to repay the city's debt, and what is left over will go into a capital fund to pay for large projects and community amenities.
Councillor Armstrong says the council will set up rules for the capital fund to make sure it is prudently managed and transparently run. He says no money will be spent without public consultation.