Hawke's Bay Regional Council to go ahead with Napier Port IPO, likely in early July
By Rebecca Howard
May 29 (BusinessDesk) - Hawke’s Bay Regional Council said it will proceed with a public share sale of 45 percent of Napier Port and it expects the initial public offering to take place in early July.
“The last hurdle is to satisfy ourselves around pricing and market conditions and we expect to make that decision in June with, all things being equal, an offer of shares in Napier Port occurring from early July," said regional council chair Rex Graham.
“We have agreed today that a 45 percent IPO of Napier Port will deliver the funds needed to enable the port to invest in its future growth, while protecting ratepayers from the costs, diversifying the regional council’s income streams and maintaining majority ownership and control," said Graham. The council had voted to ensure its shareholding could not be diluted to below 51 percent.
The council confirmed all Hawke’s Bay residents, including local iwi, wanting to buy shares in Napier Port would be offered a guaranteed minimum allocation of shares and there would be a period for locals to pre-register their interest before an offer opened. There would also be a priority offer for port staff.
Graham reiterated that the port needs significant investment to manage congestion and prepare for future growth. It needs, for example, a new wharf that is estimated to cost between $170 million and $190 million and is expected to be completed by 2022.
“We can’t afford to pay for this by imposing the costs of such a large commercial development on ratepayers. A minority IPO protects ratepayers from these costs and enables the regional council to diversify and de-risk its income streams, which are currently overly dependent on Napier Port," he said.
In addition to the appointments of Deutsche Craigs and Goldman Sachs New Zealand as joint lead managers, the council has confirmed the appointment of Forsyth Barr as retail co-manager to the offer.
Councillors also voted to approve the appointment of Rick Barker and Blair O’Keeffe as directors of the Napier Port board, subject to final approval of the IPO. Barker currently serves as the deputy chair of the Hawke's Bay Regional Council. Blair is a professional company director, with governance experience in local and central government, and NZX listed companies.