Napier Port share sale backed by HB ratepayers

By Gavin Evans

Nov. 23 (BusinessDesk) - Hawke’s Bay ratepayers submitting on a planned share sale for Napier Port have backed the proposal by a small margin.

Hawke’s Bay Regional Council spent the past six weeks testing its proposal to sell up to a 45 percent interest in the port through a share offer in order to free up capital and diversify the council’s investment base.

Almost 3,500 groups and individuals responded – seven times the number of submissions the council received on its draft long-term plan.

Council chair Rex Graham said a preliminary count shows just over 57 percent of submitters backed the proposed share sale – the council’s preferred option.

A little over 28 percent wanted the port retained and its expansion funded from borrowing and rates, while about 5 percent were split between a long-term lease of the port, or the sale of up to 49 percent of the business to an operating partner.

About 10 percent of submitters supported none of the options.

The council will make its decision after formal hearings early next month. More than 80 people want to be heard.

Napier is the country’s fourth-largest container port. If the sale proceeds it will be the first listing of a port since Christchurch City Council delisted Lyttelton in November 2014.

In October the council indicated the share sale could raise $181 million – leaving the council with $83 million after port-related debt of almost $87 million was settled and allowing for sale costs of about $11 million.

The council looked at its options after determining it couldn’t meet the port’s looming capital requirements and meet its increasing environmental obligations in coming years.

Napier’s port needs to expand to cope with massive growth in apple and log exports from the region and the increasing demands of the cruise ship industry.

It handled about 2.2 million tonnes of logs in the year through September, 37 percent more than the year before, and 13.5 million cartons of apples. Total cargoes in the period were a record five million tonnes, having increased 25 percent during the past two years.

The port, which expects to turn away as many as seven cruise ships next year, recently gained resource consent for a $142 million berth extension to reduce congestion. It wants that commissioned by 2022.

Total investment in the coming decade is estimated at up to $350 million, including the berth extension, other asset replacement, and growth projects.

(BusinessDesk)

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